Project-based learning (PBL), recognized as an active learning strategy, has been linked to students’ self-efficacy in prior studies, including those within physics education research. Meanwhile, technological advancements have significantly facilitated the optimization of diverse learning modes, including online learning. However, comprehensive investigations addressing questions such as how students perceive PBL and their self-efficacy, what forms of PBL design they prefer, and what benefits and challenges they encounter during its implementation remain underexplored in existing literature. This work presents the results of 1- and 2-year pedagogical research on 10 students as preservice physics teachers in an online PBL physics class, focusing on its influence on their self-efficacy within a phenomenological study. Data were collected via semistructured, in-depth interviews. Social cognitive theory, Bandura’s self-efficacy theory, and a theoretical framework for the impact of project-based learning on educational outcomes were employed as guiding frameworks to shape the interpretation of students’ experiences and perspectives. Through interpretative phenomenological analysis, the researchers identified three primary themes representing the students’ experiences. There are (1) variety of unique learning experiences based on students’ perceptions about their character, (2) pivotal experiences as catalysts in the learning process, and (3) student self-awareness. The findings contribute novel insights for educators in implementing PBL, particularly in online contexts, by highlighting strategies to accommodate diverse student personality characteristics. Moreover, the latest findings in this study, compared with relevant research that has been done previously, are discussed. The study offers valuable references for research on the interplay between PBL and self-efficacy. Possible directions for further research are discussed.