Team-based learning (TBL) strategy is being adopted in medical education to implement interactive small group learning. We have modified classical TBL to fit our curricular needs and approach. Anatomy lectures were replaced with TBL that required preparation of assigned content specific discussion topics (in the text referred as "discussion topics"), an individual self-assessment quiz (IRAT), analysis of the discussion topics, and then the team retaking the same quiz (GRAT) for discussion and deeper learning. Embryology and clinical correlations were given as lectures. Unit examinations consisted of graded IRAT and GRAT. The National Board of Medical Examiners (NBME) Subject Examination was the comprehensive final examination. To evaluate the effect of TBL on student performance we compared the departmental and NBME subject examination scores between the traditional and TBL curricula. We collected five years of data on student performance in TBL-based anatomy and lecture-based preclinical courses. Our results show that departmental and NBME subject examination scores for TBL-based anatomy were higher than those for lecture-based anatomy. We subsequently compared average NBME scores for anatomy with those in other preclinical courses that were lecture-based. Average NBME anatomy scores were significantly higher than those for all the lecture-based preclinical courses. Since the introduction of TBL in anatomy, student performance has progressively improved in the NBME subject examination. Students perceived TBL as a motivator to be a responsible team member and to contribute to collective learning by the team. Further, it reinforced self-directed learning and fostered an appreciation for peer respect. Interestingly, these perceptions were uniform irrespective of student course performance. (Contains 2 tables and 3 figures.)