Professional learning communities have become increasingly popular in schools to help teachers improve their pedagogical content knowledge and classroom practices. They are often formed within schools. Although the benefits of professional learning communities are well documented in the literature, little research has been conducted to investigate the key factors affecting the effectiveness of a professional learning community formed across schools. This research project aimed to facilitate Hong Kong chemistry teachers to use performance-based assessments when their students plan and conduct inquiry-based laboratory work. Professional learning communities are useful to help teachers enhance their assessment literacy, but there are few chemistry teachers in each school to form an effective community. In this project, professional learning communities were formed across schools so that teachers can share missions, participate in collective action research, promote continuous development of assessment knowledge and skills, and conduct self-evaluation. The participants were 16 chemistry teachers in 10 Hong Kong secondary schools. Their teaching experience ranged from one to seven years. The project began in September 2014 and lasted for one year. Two professional learning communities were organized, each with eight teachers. Regularly scheduled face-to-face meetings were organized to facilitate teacher-teacher and researcher-teacher interactions. The project was guided by two major research questions: What are the teachers’ major concerns about implementing performance-based assessments in chemistry? What makes a professional learning community effective? Data were collected from multiple sources including classroom observations, interviews with teachers and students, artifacts, and assessment of students’ performance skills. The 16 teachers found the two professional learning communities useful to empower them to use performance-based assessments in chemistry. They actively participated in group meetings, designed inquiry-based laboratory experiments related to students’ lives, developed assessment criteria for oral presentations, planning of experimental procedures and written laboratory reports, and designed instruments to assess students’ affective learning outcomes such as attitudes and self-efficacy. Four key factors were identified to develop and sustain an effective professional learning community formed across schools: shared values and vision, collaborative learning, reflective dialogue, and external support. In particular, the professional support provided by an external change agent was critically important to advise the participating teachers on the collection, analysis, and interpretation of students’ assessment data. The external change agent was also helpful to reduce cognitive and affective conflict in group work. The implications of these findings for developing professional learning communities in schools are discussed.