Group work is often a key component of student-centered pedagogies, but there is conflicting evidence about what types of groups provide the most benefit for undergraduate students. We investigated student learning outcomes and attitudes toward working in groups when students were assigned to groups using different methods in a large-enrollment, student-centered class. We were particularly interested in how students entering the class with different levels of competence in biology performed in homogeneous or heterogeneous groups, and what types of group compositions were formed using different methods of group formation. We found that low-competence students had higher learning outcomes when they were in heterogeneous groups, while mid- and high-competence students performed equally well in both group types. Students of all competence types had better attitudes toward group work in heterogeneous groups. The use of student demographic variables to preemptively form groups and allowing students to self-select their group mates both yielded heterogeneous competence groups. Students in the instructor-formed, demographic groups had higher learning outcomes compared with students allowed to self-select. Thus, heterogeneous groupings provided the most benefit for students in our nonmajors, large-enrollment class.