Undergraduate dental students acquire their clinical skills through the hands-on training on phantom heads. This is essential to develop their skills and experience and to ensure they can undertake safe and competent dental procedures on patients. However, the literature lacks a comprehensive approach capable of assessing dental clinical simulation skills objectively and at the same time incorporating all the tools necessary for effective learning. A brief overview of the literature regarding clinical skills assessment was performed to define specific recommendations for implementation of dental clinical skills assessment tools. Selected best theories and methods for a successful package of tools were gleaned from the existing medical and dental literature. This paper defines specific recommendations for implementation of dental clinical skills assessment tools necessary for effective teaching of tooth cavity preparation in clinical simulation laboratories. The recommended approach of comprehensive assessment was broken down into three main components (1) clinical simulation skill assessment, (2) self-assessment, and (3) student feedback and reflection. The conclusions and recommendations offered herein are intended to enhance course design and current teaching methods in dentistry rather than replace them. The following recommendations were made: (1) Dental schools need to seek to ensure that valid and reliable standard settings are applied to their assessments which, if accomplished, are very likely to enhance their educational outcomes. (2) It is important to get students to understand and positively respond to feedback which can be achieved by creating a module culture in which students are encouraged to share and discuss their mistakes openly. Proper feedback will ensure better performance and improved self-assessment skills. (3) Staff members should utilize a more consistent pattern of feedback and review their techniques periodically to continually improve the teaching process. Such recommendations, if enforced thoroughly, would be helpful in aiding tutors and course instructors assess dental clinical simulation skills components objectively and identify the clinically weaker students.