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As online and blended learning has become common place educational strategy in higher education, educators need to reconceptualise fundamental issues of teaching, learning and assessment in non traditional spaces. These issues include concepts such as validity and reliability of assessment in online environments in relation to serving the intended purposes, as well as understanding how formative assessment functions within online and blended learning. This article provides a systematic qualitative review of the research literature on online formative assessment in higher education. As an integrative narrative review, the method applied in this review entailed systematic searching, reviewing, and writing this review of the literature to bring together key themes and findings of research in this field. The authors applied qualitative thematic criteria in selecting and reviewing the available literature from which they focused on identifying and analyzing the core themes that are central to the concept of formative assessment with a key focus on application of formative assessment within blended and online contexts. Various techniques were identified for formative assessment by the individual, peers and the teacher, many of which were linked with online tools such as self-test quiz tools, discussion forums and e-portfolios. The benefits identified include improvement of learner engagement and centrality in the process as key actors, including the development of a learning community. The key findings are that effective online formative assessment can foster a learner and assessment centered focus through formative feedback and enhanced learner engagement with valuable learning experiences. Ongoing authentic assessment activities and interactive formative feedback were identified as important characteristics that can address threats to validity and reliability within the context of online formative assessment. (Contains 1 table.)