Introduction: The Student Practice Evaluation Form—Revised Edition (SPEF-R) is used by all Australian universities to assess the capability and performance of occupational therapy students on block practice placements. The occupational therapy landscape in Australia has evolved significantly since the SPEF-R was developed. This study aimed to review the SPEF-R and develop a revised edition, the SPEF-R2. Methods: The first cycle of an action research process involved four phases: (a) mapping the SPEF-R to the Australian Occupational Therapy Competency Standards 2018 (AOTCS); (b) development of the SPEF-R2; (c) national consultation through an online survey with clinicians, university staff and students; and (d) reflection and further amendments. Results: In phase 1, good alignment was found between the AOTCS 2018 and the SPEF-R. In phase 2, the SPEF-R2 was developed to further enhance alignment, including expanded content related to culturally responsive practice, reflective practice and clinical/professional reasoning, resulting in two items being added to the tool. Further wording adjustments were made to improve clarity, reduce duplication and improve relevance to the contemporary occupational therapy landscape. In phase 3, survey results indicated that the SPEF-R2 was well received overall, with most participants viewing it as an improvement on the SPEF-R. Cultural content and reflective practice additions in particular received positive feedback. Concerns were raised by some participants, including perceived repetition, the length of the tool and time required for completion, and addressed by further amendments in phase 4. Three items were removed or consolidated elsewhere, and three items became core items. Conclusion: The Australian occupational therapy community considers the SPEF-R2 to be a timely and much-needed development. Piloting of the SPEF-R2 and final revisions prior to release are planned for subsequent action cycles and amendments will be made to the online platform and associated training resources.