The purpose of this study is to explore whether, and if so how, a design activity could encourage students to express and develop knowledge on emerging technology in relation to issues about sustainability. Several researchers have asserted that, in today’s technologically dependent society, it is important to be able to control technology and make informed decisions connected to technology. Design activities could make a significant contribution to technology education while students are developing their knowledge about technology. Thus, the present study aims to analyze students’ verbal interactions as they work in a design project, which includes designing a model of a house, regarding their ability to develop technological literacy with the support of a physical model. The study is based on several small-group interactions that were recorded, transcribed, analyzed, and discussed. This research project was conducted as an observation of technology education in a Swedish compulsory school. The students (aged 13–14) negotiated and shared knowledge about technology as they interacted with their fellow students. The results indicate that, in a relatively large number of situations, the students expressed knowledge about emerging technology and adopted a sustainability perspective while working in a design activity, and thereby, successively developed technological literacy. This meant that the students were able to integrate knowledge on emerging technology like graphene, nanotechnology, and algae batteries in their models. Furthermore, the results indicate that, during technical development work, students were able to develop reasoning, communication, and collaboration skills.