This paper presents an interdisciplinary research project that studies the impact of collaborative project-based learning (CPBL) on the development of self-efficacy of students from various ethnic groups in an undergraduate senior-level computer networking class. Grounded in social constructivist and situated theories of learning, the study provides an in-depth analysis of how individual learners' characteristics, the social aspects of learning, and the pedagogical components in CPBL interact to affect student learning in an urban academic setting. The findings of this study indicate that significant learning outcomes and higher perceived efficacy in engineering design were directly related to the project experience. Moreover, although Hispanic students started with lower domain-specific efficacy, they demonstrated the largest growth of self-efficacy through CPBL. While subsequent studies have been conducted to create a more generalizable description, the current study suggests several areas to improve the CPBL learning experience for underrepresented engineering students within the urban context of this study.