Student engagement is a very important topic in higher education hence, it drew a lot of research interest over the years. The use of educational MultiUser Virtual Environments (MUVEs) that provide synchronous interaction, dynamic, interactive and social learning experiences have the potential to increase student engagement and contribute to their learning experience. Due to increased social and cognitive presence, the use of such environments can result in greater student engagement when compared to traditional asynchronous learning environments. In this work, we hypothesized that students' engagement in collaborative learning activities will increase if Transactive Memory System (TMS) constructs are present. Thus, we employed the theory of TMS that emphasizes the importance of Specialization, Coordination and Credibility between members in a team. The results show that there is a significant correlation between the development of TMS and students' engagement. In addition, further quantitative and observation analysis reveals some interesting facts about students' engagement with respect to their collaboration in group activities.