When students collaboratively design and build artifacts that require relevant understanding and application of science, many aspects of scientific literacy are developed. Design-based inquiry (DBI) is one such pedagogy that can serve these desired goals of science education well. Focusing on a Projectile Science curriculum previously found to be implemented with satisfactory fidelity, we investigate the many hidden challenges when using DBI with Grade 8 students from one school in Singapore. A case study method was used to analyze video recordings of DBI lessons conducted over 10 weeks, project presentations, and interviews to ascertain the opportunities for developing scientific literacy among participants. One critical factor that hindered learning was task selection by teachers, which emphasized generic scientific process skills over more important cognitive and epistemic learning goals. Teachers and students were also jointly engaged in forms of inquiry that underscored artifact completion over deeper conceptual and epistemic understanding of science. Our research surfaced two other confounding factors that undermined the curriculum; unanticipated teacher effects and the underestimation of the complexity of DBI and of inquiry science in general. Thus, even though motivated or experienced teachers can implement an inquiry science curriculum with good fidelity and enjoy school-wide support, these by themselves will not guarantee deep learning of scientific literacy in DBI. Recommendations are made for navigating the hands- and minds-on aspects of learning science that is an asset as well as inherent danger during DBI teaching.