This discussion paper was prepared at AASHTO’s request to clarify the relationship between asset management and performance management and to help ensure that efforts to advance these related concepts are coordinated. The basic principles of asset management and performance management are the same and the two concepts are not in conflict. The term asset management can be used to describe a performance-based approach for managing transportation system physical assets. The term performance management can then be used to describe the application of the same basic principles used in asset management to the broader set of performance objectives related to system operations/reliability, safety, congestion relief, freight mobility, environment, etc., as well as to aspects of a transportation organization itself such as project and program delivery.