How is knowledge represented and organized in the mind? What role does it play in discourse comprehension and interpretation? What are the exact mechanisms whereby knowledge-based processes are utilised in comprehension? These are questions that have puzzled psycholinguists and cognitive psychologists for years. Despite major developments in the field of second language (L2) reading over the last two decades, many attempts at explaining the role of knowledge in L2 comprehension have been made almost exclusively in the context of schema theory, a perspective that provides an expectation-driven conception of the role of knowledge and considers that preexisting knowledge provides the main guiding context through which information is processed and interpreted. In this article, I first review and critically analyze the major assumptions underlying schema theory and the processes that it postulates underlie knowledge representation and comprehension. Then I consider an alternative perspective, a construction-integration model of discourse comprehension, and discuss how this perspective, when applied to L2 reading comprehension, offers a fundamentally different and more detailed account of the role of knowledge and knowledge-based processes that L2 researchers had previously tried to explain within schema-theoretic principles.