This paper tracks the development of a problem-based learning module called the Biosystems Engineering Design Challenge at University College Dublin. The focus of the module is on designing and building a working, bench-scale device that solves a practical problem relevant to Biosystems Engineering. It provides an early opportunity for students to learn about engineering design, project management and teamwork. The module aligns well with the University’s policy to introduce alternative teaching and learning strategies compared to the conventional lecture. Enrolled students from a wide variety of programmes are split into teams of up to seven and meet an assigned mentor each week during a semester to solve a specified problem. The objectives thus far have focused on water-driven electricity generation, treatment of greywater from domestic buildings, and biofiltration of malodours from food waste. The assessment criteria include teamwork, minimisation of expenditure, device design, innovation, operational safety, system performance, report writing and appropriate use of biological and recycled materials. External experts evaluate each entry and substantial cash prizes are awarded to the top teams. Students receive individual academic grades based on their contribution. Eight Stage One undergraduate students from the 2005/06 module co-authored a paper which finished second in an international competition. Feedback on the module has been very positive from both inside and outside the University. The most recent changes have been the introduction of an online project journal for each student and the involvement of graduate students as mentors. In summary, the innovative use of problem-solving in this recently developed module has enhanced the learning experience for a diverse range of students.