Action research assumes the active engagement of the stakeholders, such as the community, in the research, and a multiple-level process of reflection in order to evaluate and monitor the actions taken. This makes action research a suitable methodology to increase the critical understanding of the participants. In this paper we describe the challenge of teaching action research within the context of an undergraduate community health psychology module. The module was designed using principles from transformative learning, critical pedagogy and action learning. The module took place over one semester; and 15 students (13 females, two males) took part in it. We discuss the background to the module development and the alignment of the learning objectives with the teaching and assessment methods, and reflect upon the students' experiences in the module and the learning outcomes. We conclude by addressing the major challenges involved in teaching action research to increase critical understanding: the ability to engage in deep learning of undergraduate psychology students; our role and expectations as tutors on the course; and the current higher education system in which action science yet has to find a place. (Contains 2 tables.)