In the Prospective Principals' Program at Stanford University, students are engaged in problem-based learning (PBL), a cooperative, small-group approach providing opportunities to resolve problems likely to confront real-world professionals. To illustrate PBL's background and rationale, chapter 1 briefly describes how the topic of teacher selection might be introduced using traditional, case-method, and PBL approaches. Chapter 2 focuses on the students' role and how instructors can minimize the frustration and difficulties students experience in Stanford's PBL curriculum. Chapter 3 describes a field test of the teacher selection project, focusing on valuable lessons for student and instructor. Chapter 4 explains the instructor's role in PBL and how to deal with potential challenges arising while implementing a PBL project. The fifth chapter contains six student essays to illustrate what students report learning about leadership and various administrative skills. Chapter 6 describes possible obstacles hindering PBL implementation and outlines a strategy for overcoming these impediments. The last chapter focuses on future challenges, including explicating student-centered learning, facilitating administrators' lifelong learning, conducting research on PBL effectiveness, and exploring other PBL contexts for educating administrators. Appendices provide a description of Stanford's PBL program, samples of problem-stimulated learning projects, and a project checklist. (50 references) (MLH)