Collaborative teamwork is a common practice in both science and engineering schools and workplaces. This study, using a mixed-methods approach, was designed to identify which team discourse characteristics are correlated with changes in student self-efficacy and achievement. Bandura's self-efficacy theory constitutes the theoretical framework. Seven teams, consisting of first-year engineering students, took the pre- and post-surveys and were video- and audio-recorded during a semester-long Introduction to Engineering Design course. Three instruments were developed: a self-efficacy survey, a team interaction observation protocol, and a team interaction self-report survey. The reliability and validity of these instruments were established. An iterative process of code development and refinement led to the development of thirty-five discourse types, which were grouped under six discourse categories: task-oriented, response-oriented, learning-oriented, support-oriented, challenge-oriented, and disruptive. The results of the quantitative data analysis showed that achievement and gain in self-efficacy were significantly correlated ( r=.55, p<.01). There was also a positive correlation between support-orientated discourse and post self-efficacy scores ( r=.43, p<.05). Negative correlations were observed between disruptive discourse behaviors and post self-efficacy (r=−.48, p<.05). Neither being challenged by peers nor receiving negative feedback revealed significant correlations with student self-efficacy. In addition, no direct correlations between the team discourse characteristics and achievement were found. These findings suggest that collaborative teamwork can lead to achievement to the extent that it supports self-efficacy. They also suggest that interactions such as receiving positive or negative feedback have less impact on self-efficacy than does the overall constructive behavior of the group. The qualitative component of the study, which focused on three case studies, presents how supportive and disruptive interactions occurred during team discourse. Discussion includes recommendations for educators on how to help teams build supportive environments as well as what to look for when forming teams and evaluating student team interactions.