The main objective of this study is to evaluate the effects of the designed 5E model of inquiry approaches with PhET simulations instruction in teaching electricity concepts on grade eighth students. True-experimental research design was employ, which had experimental and control groups (38 students in the experimental and 41 students in the control group). It took place in millennium progress academy in Bahir Dar town, Ethiopia. PhET simulation incorporated with 5E models of inquiry learning approach was employed, for the experimental group and lecturing teaching approach was for the controlled groups. Close-ended conceptual questions were use, to collect data from the respondents and they were select by random sampling, lottery techniques. The data were analyzes through IBM SPSS statistics. Before instruction, both group students had the same level of conceptual understanding in the concept of electricity. This study revealed students‟ conceptions from a developing country Ethiopia. After instruction CG students showed little conceptual changes on each contents of knowledge. However, students who taught with PhET simulation incorporated with 5E models of inquiry teaching strategy showed a considerable shift on each contents of knowledge than lecturing instruction. Therefore, PhET simulation incorporated with 5E models of inquiry teaching strategy resulted in better students‟ conceptual understanding of electricity than lecturing instruction. In addition, the study recommended to teachers to apply PhET simulation incorporated with 5E models of inquiry teaching strategy in teaching electricity contents. Moreover, the study should replicated by using larger samples to provide basis for more generalization of the conclusions. Generally, the government should encourage PhET-simulation incorporated with 5E models of inquiry instructional approaches of physics instruction by provision of computer units and PhETsimulation software.