Retention and transfer of information were tested in a second-year bachelor design-based learning project, and compared with a traditional bachelor level course. The project Signal and Systems is a core and compulsory course within the physics curriculum of the Applied Physics Department at the Eindhoven University of Technology, the Netherlands. Students from different year-level cohorts participated in a study consisting of a 15-open question test on systems, control technology, and Laplace transform. Students’ perceptions of active learning educational factors that may support understanding and the retention and transfer of information were also measured. A small number of students were interviewed in focus groups to validate the data on elements that promote retention and transfer. Results indicate that students following the design-based learning project recorded higher median marks in their assignments compared to those enrolled in the traditional course. Students from all cohorts agreed that the educational factors promoting learning were repetition of topics throughout the bachelor curriculum, practicing and providing feedback, and an explanation on errors made. Results from this study serve as a suitable example for tertiary educational practitioners to use design-based learning to facilitate retention and transfer.