This study explores the nature of mentoring in a practical preservice teacher project. As part of an early childhood/primary teaching course, students attended weekly playgroups for preschool children and families, in some separate sites within the community. Small groups of preservice teachers worked alongside a mentor as they took responsibility for planning and implementing the program. The research was initiated as there was little known about the way mentors approached their role in this program and there was no information regarding the impact of mentoring on student learning during the program. This qualitative study aimed, firstly, to investigate the nature of mentoring in one playgroup site and, secondly, to explore the student learning taking place within the program. By using an ethnographic approach to the study that involved an academic year in the field, this research provided detailed, intricate information from the perspectives of the participants. Data was collected from the evaluation/planning sessions which occurred every week of the program following the playgroup, from interviews with the mentor and the group of students, and from student journals. To organise and analyse the extensive collection of data, IDR (Inductive Data Reduction) was used. By using this approach, themes emerged directly from the data that addressed the research questions. The findings revealed that the qualities of the mentor were paramount in the success of the program. The mentor in this study was a friendly, caring person with moral purpose who created an environment in which the students felt comfortable and supported. Within this environment, the group of students experienced the role of a teacher; they freely reflected on and discussed their teaching practice. As the research study evolved, links to transformative learning, as espoused by Mezirow (1978, 1981), became apparent. A supportive mentor and a group of students from diverse backgrounds created opportunities for students to be exposed to and discuss different points of view. Transformative learning occurred when their underlying beliefs and assumptions were modified. This study provides significant information for developers of early childhood teacher education programs. It explores how small group mentoring in a teaching environment supports transformative learning. It also gives recommendations regarding selection of and professional development for mentors.