This study investigated the effects of supplemental instruction, a peer-assisted learning approach, on students, learning competence and academic performance. The supplemental instruction intervention facilitated by senior students focused on developing students' use of study skills and enhancing their motivation and academic performance. Pre- and post-intervention learning competence measures (the 10 scales of the Learning and Study Strategies Inventory) were available for 430 first year undergraduate business students (Supplemental Instruction, n = 109; Non-Supplemental Instruction, n = 321) from a university in Hong Kong. Structural equation modeling demonstrated that supplemental instruction had a significant effect on academic performance, both directly and indirectly via enhancement of student learning competence, after controlling for pre-intervention learning strategy scores and previous academic achievement. This study provides evidence that supplemental instruction can be a very effective instructional strategy for promoting undergraduate student learning. (Contains 3 tables and 1 figure.)