In this paper we examine the role of domain knowledge in the process of hypothesis generation and problem representation during diagnostic reasoning. An on-line task environment and the combination of discourse and protocol analysis techniques were used to test the differences between two groups of experts solving a clinical problem. The groups consisted of high domain knowledgesubjects (HDK) -endocrinologists- and low domain-knowledge (LDK) subjects cardiologists-. TTie results show that HDK subjects used a more efficient process of diagnostic reasoning as generated a more coherent representation of the problem. A two-stage model describing the process of hypothesis generation was proposed to explain the differences in theprocess of hypothesis generation.