This study compared the effectiveness of computer simulated experiments with that of parallel instruction involving hands-on laboratory experiments for teaching volume displacement concepts. The purpose of the simulation was to have students test their misconceptions rather than simply being told about erroneous misconceptions. This study also assessed the differential effect of students' understanding of the volume displacement concepts in the cognitive category of knowledge and application. In addition, it compared the degree of retention, after 30 days, of both treatment groups. 389 students from 6 Malaysian schools participated in the study. The results indicated that there were significant differences between the two groups in terms of learning gains in the cognitive category of knowledge as well as in the cognitive category of application. The implications of these results for the design of computer-based instruction for the teaching of science are discussed.