Learning from examples is a very effective means of initial cognitive skill acquisition. There is an enormous body of research on the specifics of this learning method. This article presents an instructionally oriented theory of example-based learning that integrates theoretical assumptions and findings from three research areas: learning from worked examples, observational learning, and analogical reasoning. This theory has descriptive and prescriptive elements. The descriptive subtheory deals with (a) the relevance and effectiveness of examples, (b) phases of skill acquisition, and (c) learning processes. The prescriptive subtheory proposes instructional principles that make full exploitation of the potential of example-based learning possible.