This qualitative study investigated a situated learning environment implemented in an educational technology course where pre-service teachers worked collaboratively on meaningful real-world projects, assuming the role of professional teachers. With a traditional learning environment as a critical frame of reference, we found that the students in the situated learning environment demonstrated sophisticated problem-solving skills, exhibited metacognitive awareness, produced coherent artifacts, and showed high levels of motivation. The findings implied that if we want to successfully implement situated learning, effort should be made to promote a constructive learning culture, improve individual performance, manage students' perceptions, and foster their positive attitudes. (Contains 3 figures and 2 tables.)