Digital literacy (DL), a term that emerged with the explosion of digital information and multimedia technology, refers to basic competence in using digital technology. The present study first analyzed the evolvement from media literacy to digital literacy and developed a four-branch theoretical framework of DL by investigating related definitions of it. For the purpose of fostering DL, a set of web-based collaborative inquiry learning (WCIL) activities was designed and were implemented on weblog to further the DL of secondary 3 students (aged 14 to 15). To provide students with the necessary support and facilitate their progress, eight fortnightly lessons of one to one and a half hours each were arranged, at which students were asked to report/present the latest progress of their WCIL project, and their teacher gave suggestions and offered the students resources to deal with the problems they had encountered. The purpose of this study was to explore the effects of the WCIL activities on student DL levels and the problems that might be encountered by students and teachers in carrying out the activities. Data were collected from a variety of sources, including lesson observations, focus group interviews, and student weblog postings. The findings show that (1) the WCIL activities were useful in involving students in DL practices and improved student DL levels across a wide variety of indicators, and (2) problems in the implementation of the WCIL activities included inexperience in collaborative inquiry learning, insufficient leadership skills of group leaders, and inadequate DL, which was mainly embodied as the difficulties that the students had in analyzing and synthesizing inquiry materials and improving the level of their accuracy in accessing information. In addition to their development in DL, students also reported social benefits obtained through WCIL, which was embodied as their improvement in collaborative ability, interpersonal skills, leadership skills, articulacy, ability to adapt, judgment, and the courage to carry out interviews and surveys with strangers. Given these benefits, this study only represents a single case, and thus the findings may not be replicable in other educational settings. Further studies are needed to clarify the effect of WCIL on student DL. (Contains 3 figures and 1 footnote.)