Innovation and entrepreneurship education comes as an important part in higher education reform as well as an inevitable prerequisite for the country to implement a strategy of innovative development. Development of a performance evaluation index system plays an important role in defining the goal, improving the quality, and promoting the reform of innovation and entrepreneurship education in application-oriented colleges. Through analysis of the characteristics of this education, analysis of the major problems in the evaluations, and determination of the index weights by step analysis, a performance evaluation index system was developed, concerning the four parties of colleges, teachers, students and social organizations, which is aimed at constant improvement of the innovation and entrepreneurship education in application-oriented colleges.