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.