Although competency-based medical education (CBME) has attracted renewed interest in recent years among educators and policy-makers in the health care professions, there is little agreement on many aspects of this paradigm. We convened a unique partnership - the International CBME Collaborators - to examine conceptual issues and current debates in CBME. We engaged in a multi-stage group process and held a consensus conference with the aim of reviewing the scholarly literature of competency-based medical education, identifying controversies in need of clarification, proposing definitions and concepts that could be useful to educators across many jurisdictions, and exploring future directions for this approach to preparing health professionals. In this paper, we describe the evolution of CBME from the outcomes movement in the 20th century to a renewed approach that, focused on accountability and curricular outcomes and organized around competencies, promotes greater learner-centredness and de-emphasizes time-based curricular design. In this paradigm, competence and related terms are redefined to emphasize their multi-dimensional, dynamic, developmental, and contextual nature. CBME therefore has significant implications for the planning of medical curricula and will have an important impact in reshaping the enterprise of medical education. We elaborate on this emerging CBME approach and its related concepts, and invite medical educators everywhere to enter into further dialogue about the promise and the potential perils of competency-based medical curricula for the 21st century.