Physics teachers need diagnostic competence to effectively identify students' misconceptions, but studies have yet to sufficiently investigate how this competence can be advanced through various instructional strategies. In this study, we compared a problem-solving strategy against an example-based strategy in advancing diagnostic competence in science teacher education. For both instructional strategies, we used tasks from Diagnoser.com and controlled for preservice teachers' prior diagnostic knowledge. A total of 81 preservice teachers teaching physics took part in the controlled field experiment. A between-subjects experimental design was used to assess preservice teachers' diagnostic competence. We used a standardized test to measure their diagnostic competence before and after the intervention. To measure diagnostic competence, we focused on conceptual diagnostic knowledge and knowledge about strategic routines (procedural knowledge). The results showed that the problem-solving strategy enhanced preservice teachers' conceptual diagnostic knowledge significantly more than the example-based strategy did, t(77) = 2.96, p = 0.011, d = 0.812. We also found that problem-solving was better than example-based learning in enhancing diagnostic competence in the form of conceptual knowledge in comparison with a control group, t(77) = 4.97, p < 0.001, d = 1.382. We conclude that, even though both instructional strategies can be used to advance preservice teachers' diagnostic competence with respect to knowledge about concepts, problem-solving is better for enhancing diagnostic competence in identifying students' misconceptions than example-based learning is. It is possible that a problem-solving instructional strategy has a stronger positive effect on the acquisition of knowledge about concepts than on knowledge about procedures because this strategy provides scaffolding during the learning process.