This study examined a cohort of middle school pre-service mathematics teachers' understanding of the rate of change as they engaged in a model development sequence. By adopting a design-based research perspective, a model development sequence on the concept of rate of change has been designed and implemented as part of a mathematical modeling course for pre-service teachers. The data were collected from twenty senior year middle school pre-service mathematics teachers (PSTs) through questionnaires, modeling activities, reflection papers, and semi-structured interviews. The data analysis showed that PSTs have difficulties conceptualizing the rate of change and conceiving it as a multiplicative comparison of changes in two covarying quantities. As they frequently employed its percentage interpretation, PSTs experienced additional difficulty conceiving the conventional meaning of rate of change in a population growth context. PSTs generally used motion context as a reference while explaining the rate of change in different non-motion contexts. In general, PSTs developed their conception of the additive rate of change throughout the model development sequence. However, for some PSTs, difficulty in ratio-based reasoning on the rate of change in different non-motion contexts prevailed. We provided some arguments concerning the teaching and learning of rate of change.