The product inhibition of the 4-methylumbelliferyl phosphate (MUB-P) decay rate, a measure of potential acid phosphatase activity, has not been considered in most of the published kinetic studies. The aim of this study was to determine the type and strength of the product inhibition in order to better define reaction conditions at which the acid phosphatase activity assay produces unbiased results. The MUB-P decay rate was measured in the forest floor and topsoil organic horizons of two spruce forest catchments at different initial MUB-P and P-PO43− concentrations. The type and strength of the inhibition was analyzed by non-linear regression. We found that MUB-P decay was competitively inhibited by the P-PO43− but also by dissolved organic P. By using estimated kinetic parameters, we calculated an underestimation of potential acid phosphatase activity by up to ~ 20% at concentrations of added MUB-P as high as 300 µmol g−1 dry weight and an incubation time one hour due to background inorganic and organic P concentrations in range of units of µmol per gram of dry soil. We discuss approaches that can be used to minimize the underestimation and show that the previously defined recommendations might not be always sufficient to avoid the bias. Therefore, we recommend to analyze progress curves at a wide range of initial MUB-P concentrations using non-linear methods when the enzyme assay is optimized for a given soil. When changes in inorganic and/or organic P concentrations are expected, we further recommend measuring background inorganic and organic P concentrations.