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This paper summarizes the discussion of the Learning from Failure in Systems Engineering panel that was held in Huntsville, AL on November 8, 2010. The panel objective was to discuss how systems engineers respond to and learn from failure and identify future directions important to the community. The panel consisted of four representatives with experience in government, industry, and academia: (1) Ronald Kadish from Booz Allen Hamilton and former director of the Missile Defense Agency, (2) Gary Payton, retired Deputy Under Secretary of the Air Force for Space Programs, (3) John Thomas from Booz Allen Hamilton and President-elect of INCOSE, and (4) Michael Griffin from the University of Alabama, Huntsville and former NASA Administrator. Each panelist was asked to (i) provide an opening statement and elaborate on their experience with failure, (ii) describe when failure is appropriate, (iii) describe how we learn and react to failure, and (iv) identify and discuss techniques to improve how systems engineers react to failure. Several common themes arose from the discussion including: failure is an option, the importance of failure to allow reassessment, and more process is not the solution. Each of these is discussed in turn along with future directions identified for reacting to and learning from failure. © 2011 Wiley Periodicals, Inc. Syst Eng [ABSTRACT FROM AUTHOR]