The purpose of doing this action research is to develop the paragraph writing skills by using portfolios. There are two main activities which enable the students to learn i.e. teaching and assessment activities. To conduct this study, the teaching activities for paragraph writing are accomplished through a process writing approach while the students' learning was assessed formatively through portfolio assessment. The study was conducted in three action research cycles which provided a knowledge and autonomy of continuously evaluating the teaching and assessment activities and their implementation in the class. The selection of research participants was done through purposive sampling with six students of grade IX. The data for portfolio development was taken from the students' activities; sample of paragraphs, self and peer assessed work samples, reflections, and feedback of teacher as well as peer. The findings of the study revealed that the use of portfolios for developing paragraph writing skills remained successful and students also became aware of new teaching and assessment strategies. Moreover, the feedback, group work, discussion, self and peer assessment found were found more fruitful in developing students paragraph writing skills. The implication from this study was that, portfolio development is a gradual process which takes considerable time and results in workload for both students and the teacher. To overcome this challenge, careful planning of teaching activities, teaching strategies, assessment activities, materials and time management was set out earlier. However, the study suggests that the portfolios are effective tools for developing students writing skills and evaluating ongoing learning of the student.