We combine class performance data from an undergraduate management course with students’ personal records to examine how group diversity affects group work performance and individual learning. Students are exogenously assigned to groups. We find that, on average, male-dominant groups performed worse in their group work and learned less (based on their grades in individually taken exams). This gender effect is highly significant in individual learning outcomes providing evidence that gender diversity is influential in the level and nature of knowledge transfers within groups. The results are robust to controlling for the team governance form, a unique feature in our study. Finally, racial diversity had no significant effect on group or individual performances.