Learning environments are a significant determinant of student behaviour, achievement and satisfaction. In this article we use students' reflective essays to identify key features of the learning environment that contributed to positive and transformative learning experiences. We explore the relationships between these features, the students' sense of safety in the learning environment (LE), the resulting learning challenge with which they could cope and their positive reports of the experience itself. Our students worked in a unique simulation of General Practice, the Safe and Effective Clinical Outcomes clinic, where they consistently reported positive experiences of learning. We analysed 77 essays from 2011 and 2012 using an immersion/crystallisation framework. Half of the students referred to the safety of the learning environment spontaneously. Students described deep learning experiences in their simulated consultations. Students valued features of the LE which contributed to a psychologically safe environment. Together with the provision of constructive support and immediate, individualised feedback this feeling of safety assisted students to find their own way through clinical dilemmas. These factors combine to make students feel relaxed and able to take on challenges that otherwise would have been overwhelming. Errors became learning opportunities and students could practice purposefully. We draw on literature from medical education, educational psychology and sociology to interpret our findings. Our results demonstrate relationships between safe learning environments, learning challenge and powerful learning experiences, justifying close attention to the construction of learning environments to promote student learning, confidence and motivation.