The role of grammatical knowledge in inferencing word meaning has not received proper attention in L2 research. Addressing this issue, the present paper provides research-based and introspective think-aloud data to examine the contribution of grammatical knowledge to inferencing the meaning of unknown words. It addresses (a) the effects of syntactic complexity of texts on inferencing word meaning, (b) the relationship between level of language proficiency and EFL learners' inferencing ability in syntactically simple and complex texts and (c) the use of linguistic and extra-linguistic knowledge sources in inferencing. The findings indicate that syntactic complexity of texts and the level of language proficiency influence word-meaning inferencing. The results also lend support to the contribution of grammatical knowledge to word-meaning inferencing and call for explicit instruction of grammatical structures in L2 contexts. (Contains 6 tables.)