Improving team interactions in engineering to model gender inclusivity has been at the forefront of many initiatives in both academia and industry. However, there has been limited evidence on the impact of gender-diverse teams on psychological safety (PS). This is important because psychological safety has been shown to be a key facet for the development of innovative ideas, and has also been shown to be a cornerstone of effective teamwork. But how does the gender diversity of a team impact the development of psychological safety? The current study was developed to explore just this through an empirical study with 38 engineering design student teams over the course of an eight-week design project. These teams were designed to be half heterogeneous (either half-men and half-women, or majority men) or other half homogeneous (all men). We captured psychological safety at five time points between the homogeneous and heterogeneous teams and also explored individual dichotomous (peer-review) ratings of psychological safety at the end of the project. Results indicated that there was no difference in psychological safety between gender homogeneous and heterogeneous teams. However, women perceived themselves as more psychologically safe with other team members who identified as women in comparison to their ratings of team members that identified as men. Women also perceived themselves to be less psychologically safe with men than men felt toward team members that identify as a woman. While males did not experience any significant differences in their perceptions of psychological safety toward any gender, the results from the perspective of women still indicate a discrepancy in perceptions between genders. These results point to the need to further explore the role of minoritized groups in psychological safety research and to explore how this effect presents itself (or is covered up) at the team level, as well as investigate impacts on all-women teams.