Music is a vital vehicle of cultural transmission, helping students understand and identify with their national culture. Chinese traditional music is not only an art form but also links directly to history, philosophy, and social life. With China’s growing emphasis on cultural confidence, music education has become an important means to promote students’ understanding of traditional culture. Conventional tests focus mainly on technical skills and fail to capture cultural meaning, whereas performance-based assessment, through authentic tasks such as creation and performance, offers a clearer account of students’ cultural understanding and cultural identity.Despite increasing interest in performance-based assessment across education, little empirical research has examined its application in music education, especially in teaching Chinese traditional music. This study addresses that gap by investigating its value and effectiveness in fostering cultural understanding.The research was grounded in socioculturally responsive assessment and drew on Evans’ (2021) four-level hierarchy (sensitive, relevant, responsive, sustaining). Based on this framework, an assessment scale was developed. A mixed-methods design combined quantitative (pre- and post-test questionnaires) with qualitative (classroom observations and teacher interviews) data collected from multiple secondary schools.Findings show that performance-based assessment significantly improved students’ understanding of Chinese traditional culture. Interdisciplinary tasks facilitated cultural transfer and strengthened cultural identity. Students advanced not only in musical skills but also in moving from initial cultural sensitivity toward deeper cultural identification. These results highlight performance-based assessment as an effective approach for integrating cultural understanding into music education while supporting cultural confidence.