Traditionally teachers lecture and deliver information or para-information knowledge in class. However, this delivering function of teachers will be gradually replaced by students’ easy access to the internet. In reaction to this new trend, one of the solutions is to adopt case method, substituting the interactive discussion for lecturing, in order to develop students’ capability, including the ability in listening, speaking, reading, and thinking. This paper attempts to provide a theoretical foundation for the interactive case teaching, and tries to divide the content of teaching into three parts, namely, information, knowledge, and the capability of acquiring knowledge. The so-called capability of acquiring knowledge refers to one’s ability to learn, integrate, apply and modify knowledge either from others or from his own experience. It also includes one’s ability in knowledge construction and creation. And this ability is not only important but also the critical part teachers can assist students to build through case teaching. Having clarified the meaning of knowledge and capability, this paper borrows from the concepts of constructivism to analyze learning by doing and by class interaction, and try to analyze the mental process of absorbing, integrating, and creating knowledge through the method of “compare and contrast” between one’s own belief and his new experience, including others’ opinions. This paper also dwells on the pedagogy employed in the process of case-teaching, such as pre-class group-discussions, in-class discussions by Q&A, students’ elaboration during a discussion, and their attentive listening to others, all of which help students elevate their abilities in acquiring knowledge or capability. Having comprehended these concepts behind the case method, teachers would have a better grasp of its spirit in practicing. Finally, quality of teaching mainly depends upon the teacher’s own knowledge construction ability.