Research comparing online and traditional course delivery methods has sought to demonstrate the equivalence of student performance in online and traditional courses. This study examines the unique proposition that online course delivery is superior to traditional when it comes to applied learning and is thus superior in the process of knowledge transfer. Students in six sections of Principles of Marketing differing in the method of course delivery are used in three studies to test this hypothesis. In the first study, online students outperformed traditional students in two of three parts of a business plan project. These findings are replicated in the second and third studies conducted in subsequent semesters. Process measures taken in the third study indicate that online students' confidence in the course material is related to a greater sense of community; a student debriefing reveals that there is more cooperation among online student teams than in traditional teams. These results indicate the usefulness of online courses for developing skills leading to the application of classroom knowledge to real-world projects. (Contains 6 tables.)