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This paper describes the introduction of engineering design into a freshman level course using projects in toy design. Toy design was chosen because the course must motivate and educate students with limited technical backgrounds and diverse interests. Real-world, hands-on toy design projects aim at simulating a professional design environment. To familiarize students with concept generation and evaluation, on-line peer evaluations were conducted several times throughout the semester, which also encouraged students to share ideas and improve their own design concepts. To further interest students, the course was developed as a paperless studio, with everything from lecture notes to projects and evaluations performed and accessible on-line. This approach is highly portable, cost-effective, and emphasizes written communication and presentation skills. Overall, the course was a success in a number of ways: (a) since its introduction as a toy design course, it has attracted enrollment from many students with nontechnical majors who otherwise would be unable to participate in traditional engineering design courses; (b) student participation improved significantly as a result of peer evaluations; and (c) professional toy designers who reviewed student work were impressed with the quality of student projects. Further improvements are underway to randomize the peer evaluation process to reduce possible student bias, increase the number of design iterations, and improve online course material.