Physiology teaching as an essential part of medical education faces tremendous criticism regarding curriculum design, methods of implementation, and application of knowledge in clinical practice. In the traditional method of medical education, physiology is taught in the first year and involves little interdisciplinary interaction. The Manipal College of Medical Sciences, Pokhara, Nepal (affiliated with the Kathmandu Univ.) started in 1994 and adopted an integrated curriculum drawn along the lines of the student-centered, problem-based, integrated, community-based, elective-oriented, and systematic (SPICES) medical curriculum. Here, physiology is taught for the first 2 yr of the 4.5-yr Bachelor of Medicine, Bachelor of Surgery course. Methodology adopted is as follows. For a particular topic, objectives are clearly defined and priority content areas are identified. An overview is given in a didactic lecture class to the entire batch of 100 students. Tutorial classes are conducted thereafter with smaller groups of students (25/batch) divided further into five subgroups of five students each. In these sessions, a problem is presented to the students as a focus for learning or as an example of what has just been taught. Each problem was accompanied with relevant questions to streamline the students' thought processes. A tutor is present throughout the session not as an instructor but as a facilitator of the learning process. A questionnaire sought students' opinion on the usefulness of this approach, relevance of the combination of problem-based learning (PBL) sessions and didactic lectures in understanding a particular topic and relating clinical conditions to basic mechanisms, and improvement of performance on the university final examination. The majority of the students opined that the combination of didactic lectures and PBL sessions was definitely beneficial regarding all the above-mentioned aspects of learning. The university results corroborated their opinion. Thus it may be considered that a judicious mixture of didactic lectures and PBL sessions is beneficial as a teaching module of physiology in medical schools. ADV PHYSIOL EDUC 24: 8–12,2000.