One important factor related to ill-structured problem-solving success is intrinsic motivation, that is, students' willingness to persist in solving the problem. Goal orientation, a motivational variable, explains reasons why students engage in the activity because they want to either learn or perform. This study investigated the relationship between these two types of goal orientations and their effects on motivation and problem solving by varying three instructional contexts designed to promote one of the two orientations. Heterogeneous and homogeneous peer grouping based on self-efficacy was also predicted to affect intrinsic motivation and problem solving. The results indicated that students in the learning-oriented context had significantly higher intrinsic motivation than those in the performance-oriented context. Students in the heterogeneous peer group had higher scores on monitoring and evaluating problem-solving subskills than those in the homogeneous peer groups. Learning-goal orientation and solution development were significantly related when students participated in the learning-oriented, heterogeneous peer grouping treatment group.