Although there has been much debate about "what" teachers need to know about technology, less attention has been paid to "how" they are supposed to learn it. Teacher preparation programs need to go beyond merely training teachers in how to use specific software and hardware tools, and instead focus on developing an understanding of the complex set of interrelationships between artifacts, users, tools, and practices. In this paper, we introduce and advocate a "Learning By Design" approach that can help teachers develop a flexible and situated understanding of technology. In this approach, inservice teachers work collaboratively in small groups to develop technological solutions to authentic pedagogical problems. We introduce the Learning by Design strategy and provide examples of its use in three different courses. We summarize what teachers learn in this approach, focusing on learning about technology, learning about design, and learning about learning.