Teachers’ understanding of children’s mathematics development through the use of a performance-based assessment was proposed to improve instruction in mathematics. The past and present achievement gap in mathematics in the nation has been evident. The problem may lie in teachers’ understanding of how children develop and learn in the domain. The performance-based assessment in this study provided teachers with a guide to understand children’s mathematical development. By understanding how each child learns, teachers were empowered to make instructional decisions to increase learning. The analyses of the findings showed a correlation between using performance-based assessment and the improvement in instructional skills in mathematics. The data imply that early childhood classrooms implementing a performance-based assessment in mathematics can improve the quality of instruction.