Educational collaboration activities are generally under-researched part of the interactive learning between universities and industry. The study based on 529 Master of Science (MSc) theses from a major Swedish engineering school, the faculty of engineering LTH at Lund University, shows that MSc theses are a frequently used collaboration mechanism between university and industry in engineering education. Collaborating firms benefit mainly by recruiting students and the transfer of technological knowledge. Moreover, mainly regional large firms benefit from the educational collaboration and firms collaborate mostly on knowledge related to product innovations and in the early stages of the product innovation process. Small and medium-sized enterprises (SMEs) tend to relate to newer engineering disciplines, have relatively more MSc thesis projects related to product innovations and later process stages, specifically in prototype development and testing, than large firms have. The paper suggests a number of university actions to increase knowledge spillover to SMEs.