Participatory research (PR) has been analyzed and documented from different points of view, with emphasis on the benefits generated for farmers. The effect of PR on organizational learning has, however, received little attention. This paper analyzes the interaction between a research and a development institution, the International Potato Center (CIP) and CARE in Peru, respectively, and makes the case that PR can contribute to creating a collaborative learning environment among organizations. The paper describes the evolution of the inter-institutional collaborative environment between the two institutions for more than a decade, including an information-transfer period (1993-1996), an action-learning period (1997-2002), and a social-learning period (2003-2007). Several lessons learned from each period are described, as are changes in institutional contexts and stakeholders' perceptions. The case shows that research and development-oriented organizations can interact fruitfully using PR as a mechanism to promote learning, flexibility in interactions, and innovation. Interactions foster the diffusion of information and the sharing of tacit knowledge within and between organizations, which in turn influences behavior. However, the paper also argues that long-term inter-organizational interactions are needed to facilitate learning, which can be used to influence the way organizations implement their interventions in a constantly changing environment. © Springer Science+Business Media B.V. 2007.