Many engineering courses include assignments where students work together in projects. The approach promotes students, among other things, to be educated and skilled in project management and managing system thinking within complex engineering environments. However, a problem with project-based learning is to accomplish a fair and valid assessment of individuals in a team setting. For example, in many project-based courses, students are only graded pass or fail, or graded collectively as a group. This paper presents results from a new course design based on CDIO-principles, with the aim to increase our understanding of individual assessment and grading in a project-based course. A preliminary conclusion is that it is possible to introduce individual assessment in a project team, assessing the learning outcomes and obtain a high level of student satisfaction. The course development process described in this study has implied a lot of struggling for the teachers involved. Hence, some general aspects of introducing CDIO-principles in a project-based course are also discussed.