Several schools have recognized the value of build-to-spec construction projects to familiarize students with manufacturing methods and computer-aided-design applications. At the U.S. Coast Guard Academy, we have introduced a project in which students in a sophomore level design course produce CAD drawings and then build a small air engine shown in Figure 1 below. The project requires students to use a variety of manufacturing tools including a lathe, milling machine, drill press, grinder, and various hand and woodworking tools. Students with no prior manufacturing experience can develop reasonable proficiency and familiarity with manufacturing processes. The students having prior experience with these processes find the project outcomes attractive enough to hold their interest. Before building the engine, students produce CAD drawings of all of the individual parts and assemble them into an animated solid model. Thus, this project provides a vehicle for students to learn how to use CAD software. The materials for the project may be acquired for less than $10.00 per engine, making this a very economical, yet practical exercise. Some of the parts require tight tolerance limits in order for the engine to operate properly, giving the students an appreciation for quality control in manufacturing processes. The completed engine is visually attractive and has interesting operating characteristics that demonstrate the operation of properly timed valves and crank-driven flywheels. The freewheeling speed of the engine provides a measure of construction quality. This paper provides an explanation of the construction and testing of the air engine, a description of how the project is integrated with laboratory and lecture activities in a sophomore level design course, and an explanation of how this activity fits into the achievement of desired educational objectives of the course and of the Mechanical Engineering degree program.