© American Society for Engineering Education, 2016. In today's changing world, professionals have to be content experts, as well as highly skilled problem solvers, team players, and lifelong learners. These professionals also need to be taught with the industry needs in mind. Ignoring this will produce graduates who are not meeting the changing needs of the industry. A real-time project based learning approach is very useful to satisfy the two primary goals: life-long learning and syncing with current industry needs. However, the challenges are manifold while doing a capstone project via distance education, especially for a large class size. Managing such class becomes challenging because an instructor has to play a critical role in defining the research question as he or she needs to measure all the skills and competencies that the student has developed during the course of the project, and at the same time be able to produce something useful the student's company. This paper presents an innovative approach for enhancing student learning outcomes in Capstone class in a distance based program. It discusses different aspects of the teaching methodologies used in the course such as content creation, setting up the deliverables to make sure the student stays engaged with the course and assessments to evaluate students on their level of competencies.