Objectives: To investigate teachers’ experiences and views regarding the mini clinical evaluation exercise as an assessment tool and to evaluate its feasibility as well as its influence on teachers’ pass/fail decisions and feedback delivery. Methods: Seventeen teachers who had all used the mini clinical evaluation exercise in assessing residents at least twice during the study period were interviewed. Transcripts of the interviews were analyzed qualitatively using a phenomenographic approach. Results: All teachers considered the mini clinical evaluation exercise as a useful assessment tool that promotes direct observation and constructive feedback. The format was considered feasible because of its easy adaptability to daily practice. Uncertainty as to what should specifically be observed during encounters, interpersonal relationships, and preconceived notions of resident performance were given as reasons for teachers’ difficulties in defining a pass or fail score. Teachers generally tended to be averse to failing residents.Conclusions: This study shows that teachers perceive the mini clinical evaluation exercise as a feasible and useful formative assessment tool. Contextual factors such as interpersonal relationships, preconceived performance notions, and lack of specific guidelines and performance standards appear to explain why teachers tend to be reluctant to fail poorly performing residents.