The current study deals with the development of system thinking skills at the junior high school level. The sample population included about 50 eighth-grade students from two different classes of an urban Israeli junior high school who studied an earth systems-based curriculum that focused on the hydro cycle. The study addressed the following research questions: (a) Could the students deal with complex systems?; (b) What has influenced the students' ability to deal with system perception?; and (c) What are the relationship among the cognitive components of system thinking? The research combined qualitative and quantitative methods and involved various research tools, which were implemented in order to collect the data concerning the students' knowledge and understanding before, during, and following the learning process. The findings indicated that the development of system thinking in the context of the earth systems consists of several sequential stages arranged in a hierarchical structure. The cognitive skills that are developed in each stage serve as the basis for the development of the next higher-order thinking skills. The research showed that in spite of the minimal initial system thinking abilities of the students most of them made some meaningful progress in their system thinking skills, and a third of them reached the highest level of system thinking in the context of the hydro cycle. Two main factors were found to be the source of the differential progress of the students: (a) the students' individual cognitive abilities, and (b) their level of involvement in the knowledge integration activities during their inquiry-based learning both indoors and outdoors.