Objective: To compare performance of medical students exposed to problem-based learning and lecture-based learning. Methods: The descriptive study was conducted at Rehman Medical College, Peshawar, Pakistan from May 20 to September 20, 2014, and comprised 146 students of 3rd year MBBS who were randomised into two equal groups. One group was taught by the traditional lecture based learning, while problem-based learning was conducted for the other group on the same topic. At the end ofsessions, the performance of the two groups was evaluated by onebest type of 50 multiple choice questions. Total marks were 100, with each question carrying 2 marks. SPSS 15 was used for statistical analysis. Results: There were 146 students who were divided into two equal groups of 73(50%) each. The mean score in the group exposed to problem-based learning was 3.2 ± 0.8 while those attending lecture-based learning was 2.7±0.8 (p= 0.0001). Conclusion: Problem-based learning was more effective than lecture based learning in the academic performance of medical students.