Narrative:

Cleared for takeoff runway 6 with student pilot for touch and goes, left traffic. After our departure, another aircraft, with solo pilot, was cleared for takeoff for touch and goes, left traffic. We climbed to 550 ft AGL and turned left onto crosswind, then left onto downwind at 2000 ft MSL (pattern altitude). Tower asked the aircraft that departed behind us if he had us in sight (twice), both times the second aircraft reported 'negative contact.' I was scanning over my left shoulder and behind for the second aircraft as I was concerned as to its position. As I scanned forward, the second aircraft appeared in front at our 11 O'clock position, at our altitude, crossing left to right. I took control from the student and entered a left descending turn to avoid, passing just under the other aircraft. The second aircraft had turned crosswind inside our pattern putting us on a collision course. Subsequently, all landed safely. Despite tower control, one must be constantly vigilant for other aircraft, at all times, in all places.

Google
 

Original NASA ASRS Text

Title: NMAC BTWN A FLT INSTRUCTOR, WITH STUDENT, DOWNWIND AND A SOLO STUDENT PLT XING OVER IN FRONT OF THEM. THE INSTRUCTOR TOOK CTL OF THE ACFT AND MADE A DSNDING TURN.

Narrative: CLRED FOR TKOF RWY 6 WITH STUDENT PLT FOR TOUCH AND GOES, L TFC. AFTER OUR DEP, ANOTHER ACFT, WITH SOLO PLT, WAS CLRED FOR TKOF FOR TOUCH AND GOES, L TFC. WE CLBED TO 550 FT AGL AND TURNED L ONTO XWIND, THEN L ONTO DOWNWIND AT 2000 FT MSL (PATTERN ALT). TWR ASKED THE ACFT THAT DEPARTED BEHIND US IF HE HAD US IN SIGHT (TWICE), BOTH TIMES THE SECOND ACFT RPTED 'NEGATIVE CONTACT.' I WAS SCANNING OVER MY L SHOULDER AND BEHIND FOR THE SECOND ACFT AS I WAS CONCERNED AS TO ITS POS. AS I SCANNED FORWARD, THE SECOND ACFT APPEARED IN FRONT AT OUR 11 O'CLOCK POS, AT OUR ALT, XING L TO R. I TOOK CTL FROM THE STUDENT AND ENTERED A L DSNDING TURN TO AVOID, PASSING JUST UNDER THE OTHER ACFT. THE SECOND ACFT HAD TURNED XWIND INSIDE OUR PATTERN PUTTING US ON A COLLISION COURSE. SUBSEQUENTLY, ALL LANDED SAFELY. DESPITE TWR CTL, ONE MUST BE CONSTANTLY VIGILANT FOR OTHER ACFT, AT ALL TIMES, IN ALL PLACES.

Data retrieved from NASA's ASRS site as of July 2007 and automatically converted to unabbreviated mixed upper/lowercase text. This report is for informational purposes with no guarantee of accuracy. See NASA's ASRS site for official report.