The study goal was to assess the innovation level of engineering students' team projects and to examine the relationships between project innovation and team heterogeneity in two online environments. Applying a two-stage mixed methods research design, the qualitative and quantitative data were obtained by interviews with experts in engineering education followed by a multilayered analysis of students' projects. The study included 190 engineering students who studied the same course, half via a hybrid approach and half via a massive open online course (MOOC). Findings identified innovation type, product necessity, STEM interdisciplinary, and market readiness, as central constructs for assessing the innovation level of students' projects. The Hybrid group received higher scores for innovation type, as they created projects with a potential for radical innovation. Project innovation was positively correlated with team heterogeneity in academic discipline and academic level; heterogeneity in native language was identified as a hindering factor.