An important prerequisite for prospective competitive factories is an enduring development of production-related competencies in today's universities for manufacturing engineering. Learning Factories are an action-oriented approach for developing these competencies. They are highly authentic learning environments in which genuine products are manufactured in a simulated but life-like production setting. The study aims at investigating the learning success of engineering students in a Learning Factory. Results of a conducted experiment are presented and discussed giving proof to the hypotheses that students in a Learning Factory. Results of a conducted experiment are presented and discussed giving proof to the hypotheses that students have a greater application-performance and a higher degree of action-substantiating knowledge after having attended an action-oriented learning event within the Learning Factory that after receiving a conventional treatment. (C) 2012 Published by Elsevier Ltd. Selection and/or peer-review under responsibility of The Association of Science, Education and Technology