This paper reports on the preliminary findings of an on-going study on the washback effect of the newly introduced school-based assessment (SBA) at the lower-secondary level in Malaysia. This study specifically investigates how the school-based assessment has affected the perceptions of students in relation to learning English as a second language. In addition, the study attempts to explore the students' responses to a call for change from a purely testing culture into a learning culture at the beginning of its implementation. The objectives of the study are therefore twofold: to gauge the washback effect on students' overall perceptions of SBA and external examinations and challenges of implementing School-based Assessment (SBA).Drawing on the data collected by means of questionnaires, it was found that the sampled students were equally pessimistic about external examinations and SBA. In addition, some barriers in implementing SBA as perceived by the students in the given context are reported. It is hoped that the findings of this small-scale study which was carried out after two years into the implementation of SBA, would contribute to a better understanding of the complex phenomenon of "washback" in relation to SBA in Malaysia.