Studies of student understanding of simple electric dc circuits have shown that many of them find it very difficult to apply qualitative reasoning to explain the observed phenomena. It has been suggested that these difficulties may be due to their failure to construct models of microscopic processes that lead to these phenomena. Indeed, in the traditional courses, such models have generally not been emphasized. In the present study, we compared the performance of different groups of university students in answering a questionnaire designed to probe their understanding of the relationship between macroscopic phenomena of transients in a dc circuit and the microscopic processes that can explain these phenomena. One group studied from a traditional text, the second group used a recently developed text that emphasizes models of microscopic processes. We also conducted detailed interviews with some of the students. From an analysis of the performance of these two groups, and also from a comparison with a previous study on Israeli high school students, we found that most of the students whose instructional experiences included an emphasis on the development of models of microscopic processes developed a better understanding of the transient phenomena studied. They applied qualitative considerations in their analyses and were able to develop coherent models to describe their observations. Overall, they demonstrated a superior understanding of the physical phenomena.