Virtual labs provide space for students to iteratively test, observe, and revise their understanding so as to improve their scientific literacy. However, one of the challenges that students face is that they need to think and act like scientists so as to be sensitively alert to methodological flaws and various sources of error. This study thus compared the effect of two instructional approaches using a virtual lab to enhance students' scientific literacy. Before students were given the opportunity to conduct science inquiries with the virtual lab, they were required to critique problematic inquiry cases (the critique group) or watch teachers' demonstrations (the teacher demonstration group) before taking part in the inquiry. By analyzing data from 50 middle school students, this study found that the effect of applying virtual labs can be augmented by an instructional design that engages students in critiquing experiments prior to their inquiry with the virtual lab. This study also found a limitation of the use of virtual labs in helping students transfer what they have learned from the teacher's demonstration to new inquiry contexts. A close relation among scientific literacy post-test scores, critiquing performance, and inquiry performance in the inquiry activity was detected, suggesting that student critiquing prior to inquiry is in alignment with the goal of developing students' inquiry skills and scientific literacy with virtual labs.