Education for Sustainable Development (ESD) is a key contributor to transformative change. Educational institutions are faced with the task of enabling their researchers, lectures and learners to cope with these new responsibilities. With focus on the higher education level, the underlying research presents a service-learning-based teaching and learning format (‘Sustainability Challenge’) that contributes to the target dimensions of ESD and significantly strengthens students’ key competencies for sustainability. Based on the framework of competencies for advancing sustainability transformations, an approach is proposed to evaluate the development of these key competencies. Scholarship of teaching and learning (SoTL) accompanies the two-step process of empirical research during the implementation of the module at undergraduate and postgraduate level and results in practical implications for format design. Due its flexibility, the ‘Sustainability Challenge’ can be easily integrated into all disciplines and adapted to different types of universities or educational institutions.