The University of Wollongong and partner institutions UTAS, UTS, and QUThave engaged in an ALTC funded project to address issues of intercultural competence inengineering. As a major component of this project, observational research techniquesare being employed to assess the current state of intercultural competence in first andsecond year engineering students. The research described in this paper is a processemployed by the authors to observe cultural interactions between students in first orsecond year design subjects. The process involves simple video recordings of the groups¿interactions over the course of a normal project team meeting, which are then coded andanalysed using NVivo 8. To identify cultural diversity within the observed groups andperceived intercultural competency, the observation session is followed by a brief surveywhich incorporates dimensions of self and peer evaluation. This research will beconducted at all four participating institutions over the teaching semesters of 2011. Aswell as establishing an overview of the current state of intercultural intelligence amongstengineering cohorts, these research outcomes will be used to develop packaged teachingmodules for developing intercultural intelligence amongst both engineering students andteaching staff.