Laboratory instruction is a major component of the engineering and technology undergraduate curricula. Traditional laboratory instruction is hampered by several factors including limited access to resources by students and high laboratory maintenance cost. A photorealistic 3D computer-simulated laboratory for undergraduate instruction in microcontroller technology was developed to address these issues. The virtual laboratory includes a realistic representation of devices and components used in a traditional laboratory setting. The virtual laboratory requires the students to engage in the same processes as the traditional laboratory. An initial formative evaluation of the virtual laboratory environment (VLE) was conducted with a group of 42 undergraduate students enrolled in an introductory microcontroller course at Purdue University. Findings show that students perceived the VLE experience comparable to the physical laboratory experience; in addition, they thought the VLE was easy-to use, engaging and useful. In the paper we describe the development of the VLE and report and discuss the results of the evaluation. (Contains 16 figures.)