This study implements and evaluates an action research project carried out by a teacher in a U.S. high school, where two classes of students studied Chinese as a foreign language (CFL) through project-based instruction (PBI) over an academic year. The purpose of the study was to investigate the effectiveness of PBI in teaching CFL by eliciting students' and the teacher's experiences and perceptions of PBI. Data collected included student interviews, surveys, project products, classroom observations, and teacher journals. The findings suggest that PBI is an effective approach to teaching and learning of language, culture, and other skills simultaneously. PBI was reported to be beneficial in engaging in motivating students in learning, enhancing cultural knowledge, and improving their language skills. Although students expressed difficulties with using target language during PBI, specifically with sentence structure and character memorization and recognition , they were able to see their language weakness and needs and expressed a strong desire to improve them. In the process of PBI, the teacher eastablished a collaborative relationship with students and became a learner and a facilitator in students' learning. This research also demonstrates that teacher research can be a beneficial tool for practitioners to examine students' learning as well as teachers' own teaching practice.