This study explored how to effectively apply gamification design principles to improve the quantity and quality of online discussions. Based on a game design framework: Playing Experience of Needs Satisfaction (PENS), two specific gamification design principles, (1) aligning gamification awards with specific performance expectations and (2) weighing gamification awards based on task challenging levels, were applied in online discussion forums of a graduate level online course. Data on student activities in online discussion were collected from the baseline (non-gamified) version of the course and the gamified version. Both quantitative and qualitative methods were used to examine how students interacted with each other in the gamified environment compared to non-gamified environment. Results suggested that the gamification design features promoted knowledge-building in online discussions, encouraged more decentralized and diverse interactions among students, and motivated a higher level engagement in student facilitators. Implications for further research and practices were also discussed.