This article suggests that peer interaction is most effective when orchestrated around a progression of problems. Problem-centered learning is enhanced by carefully structured peer interactions. Problem-centered instruction is a form of direct instruction wherein instructional components are taught in the context of problems. An effective problem-centered instructional strategy involves (a) facilitating learners' activation of relevant mental models, (b) demonstrating problem solutions to learners, (c) enabling learner application to the solution of new problems, and (d) facilitating integration into activities beyond the classroom by critique, discussion, and reflection. Instruction is most effective when there is appropriate peer interaction during each of these instructional phases: peer-sharing during activation, peer-discussion during demonstration, peer-collaboration during application, and peer-critique during integration. (Contains 1 figure.)