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Roskilde University was established in Denmark in 1972 as a critical reform university based on the principles of participant directed problem-oriented project learning (PPL). In 2009, the university launched a new master programme in Urban Planning (Planning Studies). This chapter presents experiences from student projects working with action research in facilitating citizen-driven urban development. Firstly, we outline the key theoretical foundations of the Planning Studies programme: planning as social learning, empowerment and social mobilization. Secondly, we describe the principles of the Roskilde University pedagogical model (PPL) rooted in the tradition of experiential and critical pedagogy of Oskar Negt, John Dewey, Paulo Freire and others. Thirdly, we present two cases of problem-oriented projects working with action research in bottom-up urban planning and sustainable transition in Copenhagen. The first case concerns the involvement of local residents in the redesign of a public square through a series of aesthetic experiments. The second case concerns an experiment with alternative transport solutions and sustainable street transition through reduction of private car use and the creation of new public spaces on former parking lots. The article concludes that action research in problem-oriented project work is promising way of involving students in community empowerment processes. Doing action research strengthens the students understanding of ‘the logic of practice’ and their ability to master practical and ethical judgements in complex real-world empowerment and learning processes. This both prepares them for professional practice and provides them with an embodied and pragmatically empowered understanding of how transformations towards a more sustainable and just society can be brought about.