This study explored the effectiveness of an inquiry-based cellulase laboratory unit in promoting inquiry in undergraduate students in biotechnology. The following tools were used to assess the students’ achievements and attitude: conceptual understanding test, concept mapping, students’ documents, CLES questionnaire, students’ self reflection, and interviews. Judging from their conceptual understanding test results and concept mapping, students gained significantly more content knowledge on enzyme-substrate interaction and its application. In addition, students’ reports on their projects revealed that they have developed their critical thinking, scientific process skills and abilities to apply knowledge on enzyme cellulase to industrial application. The students reacted positively to this teaching strategy as demonstrated by results from questionnaire responses, students’ self reflection and interviews. The success of this inquiry-based laboratory unit might be due to both the context which was of interest to students, and the instruction method which ranged from a guided to a more open inquiry. Most importantly, the teacher in this study had mastery of both content and pedagogical techniques. This inquiry-based cellulase laboratory unit provided significant benefits for teaching and learning science for biotechnology students. It promoted acquisition of content knowledge and skills such as asking good questions, predicting, problem solving, drawing conclusion, and communication. This inquiry-based laboratory unit may serve as a guideline or framework for implementing a dynamic instruction with a range of inquiry level for the undergraduates.