Problem-Based Learning is a pedagogy emphasizing student learning via solving authentic, difficult problems in teams. This paper describes the application of Problem-Based Learning in a large system dynamics and controls course for third-year undergraduate students in aerospace engineering at the Georgia Institute of Technology. The pros and cons of applying Problem-Based Learning to the teaching of controls are reviewed. The course design and implementation are described. Student opinions and grades (in this course and subsequent courses) are analyzed. The paper concludes with a discussion of lessons learned and recommendations for the application of problem-based learning.