This study aims to identify effective engagement tools and strategies that may strengthen student learning processes with a long-term impact. The context of learning plays an active role in student performance and needs to be carefully considered when designing collaborative learning environments. In the framework of a CDIO course entitled Project Course in Applied Physics (12 ECTS), master’s students in applied physics, electrical engineering, biomedical engineering, material science and nanotechnology work in groups of four to seven people for realizing their own project idea given three broad requirements: (i) use gas sensors, (ii) manage a certain maximum budget to purchase components, and (iii) build a working prototypefor any indoor air quality monitoring application of interest for them and their customer. Groupsare generally multicultural and multidisciplinary. Qualified supervision and skills training activities are adapted to facilitate the students’ progress and guarantee the success of their project work. Based on observations, feedback, and results over a five-year period, this approach appears more engaging and inspiring for both students and teachers compared to more defined projects. Encouraging the students to conceive their own original ideas, involving them in the co-creation of the learning process, and building knowledge, understanding, and skills through a variety of engaging experiences, helps their motivation, interest, active participation, and creativity with a direct impact on the quality of their learning. As an example of successful project work, here we report on two groups of students at Linköping University, Sweden, who have recently designed, developed, and tested an innovative sensor system prototype for smart monitoring of gas and particle emissions from cooking activities. The project course has received 5.0/5.0 as an overall students’ evaluation.