The purpose of this case study was to examine students' perceptions of their learning experiences while working on a real world instructional design project in a performance oriented team in the context of a situated and problem-based learning environment. Participants were 11 graduate students enrolled in a learning-by-doing instructional design program. The results revealed that, overall, students had a positive perception of their learning experiences despite difficulties related to managing expectations, which led to initial feelings of anxiety and confusion. These expectations were primarily related to the nature of the project, the degree of scaffolding provided, and teamwork.