Cognitive psychology has demonstrated that the way knowledge is structured in memory determines the ability to retain, recall, and use it to solve problems. The method of loci (MOL) is a mnemonic device that relies on spatial relationships between “loci” (e.g., locations on a familiar route or rooms in a familiar building) to arrange and recollect memorial content. In the present study, we hypothesized that the use of MOL leads to better understanding of the topic among students, which can be observed through better student performance on assessments. Students were divided into two groups: group 1 was taught insulin and diabetes mellitus through didactic lectures and a self-directed learning session, whereas group 2 was taught insulin and diabetes mellitus through didactic lectures and MOL. Memory palaces for insulin and diabetes mellitus were generated by students under supervision of the teacher and taught by students as well. A questionnaire survey and open-ended questions were given to the participants. Group 2, which underwent didactic lectures followed by a MOL interactive session, showed significantly improved performance on the assessments compared with group 1, which had been taught through didactic lectures and a self-directed learning session. Descriptive analysis showed that all students found MOL to be a helpful technique.