This paper presents an exploratory study that investigates the effects of online learning on distance education students in an open university context. Two hypotheses are posited: (1) a direct relationship exists between students' involvement in online learning and distance learning outcomes, and (2) an indirect relationship exists between these two domains via the mediating variable of an institutional Transactional Presence (TP), that is, a student's sense of the availability of and connectedness with an educational institution. Student learning achievement, satisfaction and intent-to-persist are used as indicators of outcomes of distance learning. The analysis of data garnered from 285 distance students reveals multifaceted relationships between students' engagement in online learning, their perceptions of institutional TP and the three learning outcome variables. Besides the findings, the paper will discuss factors affecting students' engagement in online learning in relation to different requirements, that is, optional or compulsory online use as well as the level of the course (undergraduate or postgraduate).