This paper describes the pedagogical impact of real-world experimental projects undertaken as part of an advanced undergraduate fluid mechanics subject at an Australian university. The projects have been organized to complement traditional lectures and introduce students to the challenges of professional design, physical modelling, data collection and analysis. An overview of two projects is presented: wind tunnel testing of buildings and wave loading on piles. Both studies are undertaken as group work within the undergraduate subject. The pedagogy of the projects is discussed in terms of the classical educational psychology literature concerning project-based learning, collaborative and guided learning and reflection. In terms of learning outcomes, the primary aim is to enable students to deliver a professional report as the final product, where physical model data are compared to ideal-fluid flow calculations and real-fluid flow analyses. Thus the students are exposed to a professional design approach involving a high level of expertise in fluid mechanics, with sufficient academic guidance to achieve carefully defined learning goals, while retaining sufficient flexibility for students to construct their own learning goals. The overall pedagogy is a blend of problem-based and project-based learning, which reflects academic research and professional practice. The assessment is a mix of peer-assessed oral presentations and written reports that aims to maximize student reflection and development. Student feedback indicated a strong motivation for courses that include a well-designed project component. (Contains 1 table and 3 figures.)