When hypermedia is used as a cognitive tool, students are placed in the author's seat so that they construct their own understanding of the subject, rather than interpreting the teachers' understanding of the subject. In such learning settings hypermedia is used not as a source of knowledge to learn from but rather as a cognitive tool to construct and to learn with. Computer technologies as cognitive tools represent a significant departure from traditional conceptions of technologies. In cognitive tools, information is not encoded in the educational communications, but learners function as designers in using the technology as tools for analyzing, accessing, representing and organizing their personal knowledge. One of the ways of using computers as cognitive tools is designing hypermedia. Jonassen (2000) and Reeves (1999) argue that knowledge acquisition as a process of design can be facilitated when learners are actively engaged in designing knowledge rather than interpreting it. Although there have been various research studies testing the effectiveness of hypermedia on students' achievement and learning, so far its effect on knowledge acquisition and retention when hypermedia is used as cognitive tool in a constructivist learning context has not been studied extensively. Therefore there is a need to examine the effect of hypermedia on knowledge acquisition and retention in comparison with traditional instruction when it is used as a cognitive tool. The aim of this study is to assess the effect of use of hypermedia as a cognitive tool in a constructivist-learning context in comparison to traditional classroom instruction on knowledge acquisition and retention. The study included a total of 56 second year pre-service teacher education students in Turkey. A pre-test/post- test control-group experimental design was used in this study. The students who enrolled the course were assigned to experimental and control groups through "matched-pair technique" based on gender, cumulative GPA scores and the types of high school they graduated from. From each pair, one student was assigned to the experimental group, the other was assigned to the control group randomly. The experimental group included 28, and the control group included 28 subjects. At the beginning of the study, both experimental and control groups were given an achievement test to measure their prior achievement level in the content of the course. Then the control group continued learning the course content with regular traditional instruction based on mainly lecture and recitation methods. The experimental group developed hypermedia about the course content in a constructivist learning context. The treatments continued 14 weeks. At the end of the treatment, the achievement test, which previously served as pre-test was given to the students in both groups again as post-test. Eight weeks after the experiment the same achievement test was given to both groups once again to measure the level of knowledge retention. The data collected through the pre, post and retention tests were analyzed through descriptive and inferential statistics such as means and t-test. The results of the study indicated that there were no significant differences between experimental and control groups in terms of pre, post and retention tests results. Even though the results showed no significant difference between the experimental and the control groups, it can be concluded from the results that using hypermedia as a cognitive tool for learning is as effective as traditional instruction in terms of knowledge acquisition and retention.