This project utilizes new equipment in developing an Intelligent Systems Laboratory (ISL). By using this equipment, senior mechanical engineering students are receiving hands-on experience with the design and manufacturing of intelligent systems. Specifically, they are becoming familiar with the theory and applications of smart materials as sensors and actuators. To maximize their learning, students work in small groups of two or three, using separate workstations at the ISL. The laboratory features eight stations composed of a desktop computer, data acquisition hardware, oscilloscope, multimeter, function generator, and a microcontroller. For economical efficiency, some items (e.g., printers and actuators) can be shared by adjacent stations or used on a rotary basis. The equipment can be used for conducting both structured experiments and design projects. The experiments include software and hardware development. Students also practice interfacing the electronic and mechanical devices. The design projects develop students' appreciation for challenges involved with proper location of sensors and actuators, preparation and application of smart materials, and manufacturing of microprocessor-based systems. The project significantly affects students' education in intelligent systems and materials through the development of a newly approved lab course, and the enhancement of three other senior-level courses. The ISL facilities can be used by one course for experiments and design projects, by two others for microprocessor-based capstone design projects, and by the other lab course for up to three structured experiments. Over the life of the new equipment, more than 500 students will benefit from the lab.