Studies were designed to determine the effectiveness of challenge-based instruction (CBI) versus traditional lecture-based instruction. Comparisons were made over a three-year period between student performance on knowledge-based questions in courses taught with taxonomy-based and challenge-based approaches to instruction. When performance on all questions was compared, CBI classes scored significantly better than control classes on 26 percent of the questions, while control classes outperformed CBI classes on eight percent of the questions, but there was no significant difference in overall performance. However, students in CBI classes performed significantly better than students in control classes on the more difficult questions (35 percent versus four percent). We attribute these differences to additional opportunities available in CBI classrooms for learners to examine their conceptual understanding. Student surveys indicate a slight preference for the challenge-based approach. We believe that the challenge-based approach is effective and has the potential to better prepare students for the workplace and for life-long learning.