The purpose of this study was to assess whether or not language teachers were applying the t,iductive approach to grammar teaching in preparatory schools. It was particularly meant to ~investigate the performance of teachers and students' activities in language classes and to discover if the learners developed the necessary strategies to use grammar for communicative purpose. Moreover, the study was targeted to investigating the conception of students about the inductive approach to grammar teaching. The study was conducted in one preparatory school of South Gondar Zone. The participants of the study were 4 teachers and 120 students in that school. The datq were collected through questionnaire, observation and interview and the results were analyzed both qu.r::..ntitatively and qualitatively. The result of the study revealed that teachers were not in a position to properly apply the inductive approach to bring the desired result in the students' grammar learning. The study indicated that though the inductive approach was not totally denied, there were problems for its implementation. The combined responses of the participants (students and teachers) revealed that the students could be form-focused, surface (shallow) learners and communicatively weak and this impact developed because of the teacheri' incompetence to implement the inductive approach and the learners' poor language background. ·