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AbstractPurpose -The purpose of this study was to explore local and international business students' perceptions of their intercultural group work experience as a mechanism for developing intercultural competence and group work skills. Design/methodology/approach -Using qualitative interviews, the group work experiences of 11 final-year undergraduate local and international students in a business program in a large Australian university were analysed. Findings -The findings suggest that international and local students working together on group assignments create social and academic situations that result in "at best" limited positive intercultural learning and relationships. Differences in expectations, motivations, language fluency, trust and relationship issues were evident when students collaborated on group assignments. Thus, it appears that group assignments are potentially flawed mechanisms for delivering the goals of intercultural competence and group work skills in business students. Practical implications -Although this exploratory study is limited in scope, the research has implications for pedagogical strategies, in particular, the use and design of group assignments and the preparation of students for working on group tasks in intercultural groups. It also has implications for developing effective learning mechanisms that lead to improved student intercultural competence, greater socio-cultural engagement and the academic success of international and local business students, as well as positive learning experiences for all. Originality/value -The findings of this study are likely to be a useful resource for university staff considering the use of group work assignments for the development of intercultural understanding and competence and collaborative skills.