With more international programs being offered by universities in Asia nowadays, students have the opportunity to study together with foreign classmates. However, in practice, there exists a level of mistrust and apprehension between local and foreign students, especially among those with different physical appearances and distant cultural backgrounds. This research aimed to identify and understand intercultural obstacles to in-class collaboration among local Taiwanese students and their foreigner classmates in a Taiwan international college. Data were collected through an open-ended questionnaire and participant observation from 52 students of different nationalities (Haitian, Indian, Malaysian, Indonesian, Thai, American-Chinese, New Zealand-Chinese, Mongolian and Taiwanese). In order to minimize cultural bias, two researchers jointly conducted content analysis in combination with ethnographic observation. This study found that differences in physical appearance and communication styles strongly deterred intercultural communication among the students in the beginning. It was found that in-class group discussions and group projects helped to dispel negative stereotypes, by cultivating greater mutual respect and understanding among the students in a multinational classroom. In fact, several misunderstandings and cultural conflicts could have been resolved in the classroom. Findings suggest that teachers have a crucial role in developing students' intercultural competence by implementing collaborative learning methods.