The recent growth in collaborative and interactive virtual learning communities integrating innovative digital technologies and contemporary learning frameworks is contributing enormously to the use of e-learning in higher education in the twenty-first century. The purpose of this study was to describe the development of a virtual learning community system within the Applied Thai Traditional Medicine (ATTM) instruction context. This started with collecting data from ATTM students (n = 303) from eight universities in Thailand. In addition, experts (n = 30) in various areas of ATTM, educational technology, and assessment participated in semistructured interviews. Using the information obtained, an online learning community system guided by the Community of Inquiry (COI) framework which incorporated advanced virtual innovations such as inquiry-based learning (IBL) activities was consequently developed. Test score results of students obtained before studying via the ATTM VCOI system showed that the sample group of 39 ATTM students had an average score of ability in problem-solving at 16.87 with standard deviation at 3.25. After studying with the system, they achieved an average score of 18.41 with standard deviation at 3.05. The results indicate that average test scores were statistically different at a 0.05 level of significance (t = -2.140, p = 0.03). Furthermore, the results also point to efficacy in regards to teaching, social and cognitive presences. The data collected indicates that use of the ATTM VCOI system can lead to a more collaborative community learning environment that can enhance ATTM students' problem-solving ability and improve the effectiveness of online learning in higher education in general and in ATTM instruction in particular.