Education in this 21st century is concerned with developing intelligences. Problem solving in real-world contexts involves multiple ways of knowing and learning. Intelligence in the real world involves not only learning how to do things effectively but also more importantly the ability to deal with novelty and growing our capacity to adapt, select and shape our interactions with the environment. Knowledge in this new millennium is increasingly characterized by the creative integration of information and learning from diverse disciplines. Educators, policy makers and researchers need to be aware of new approaches of dealing with knowledge and information where problems can be used innovatively in pedagogies. Problem-based learning (PBL) is an inquiry-based pedagogy that is best rooted in sound understanding of the psychological processes of problem solving and the development of cognition. Whilst many educators support the need to develop multiple intelligences, few realize that one of the best ways to draw forth these intelligences is to understand the psychology of using real world problem scenarios and engaging inquiry. This paper addresses the state-of-the-art of PBL along three themes. The first is the psychology of cognition, metacognition, and self-regulation in problem-based pedagogies. The second is the idea of making thinking and mind visible through dialogue and inquiry. The third theme is the use of learning environments beyond the boundaries of the classroom to enhance problem-based thinking. Finally, the implications for educational innovation and practices are discussed. (Contains 2 figures.)