Because we live in a society that increasingly depends upon technology, a growing number of voices are calling for the mandatory study of technology by school-aged children worldwide. Technological literacy is the ability to use, manage, assess, and understand technology, and involves the application of knowledge and abilities to real-world situations. In order to prepare pre-service teachers to teach this subject in junior high school, a mandatory methods course has been developed by the Department of Education in Technology and Science at the Technion, Israel Institute of Technology. One objective of the course was to prepare future teachers to design and manage learning environments that promote technological literacy. This article describes the Project-Based Technology (PBT) course whose objectives were to: (1) investigate which implementation issues and processes pre-service teachers encounter in a PBT environment whose design is based on the guidelines and professional development standards for technology teachers; (2) learn about the students' ideas (cognitive aspects), emotions (affective aspects), difficulties, and behavior (behavioral aspects) while learning in a PBT learning environment; and (3) identify the benefits and challenges, from the perspective of the students, of the PBT learning environment.