With respect to the effectiveness of types of knowledge on human diagnostic performance, the results of several experiments showed that training with procedural knowledge (diagnostic rules) is more effective than that with principle knowledge (theoretical knowledge). However, common experience suggests that understanding the principles of system dynamics is valuable in certain diagnostic situations. In this study, we conducted an experiment to investigate the value of principle knowledge in various fault situations. A context-free digital logic circuit that includes forty-one gates of three basic types was simulated for the subjects to diagnose. The experimental results showed that instructing principle knowledge has positive effects that are dependent upon the complexity of diagnostic problems. The observations also provide insights on how fault diagnosis benefits from principle knowledge.