In recent years, a number of studies have attempted to assess the English vocabulary knowledge of high-school students and undergraduate university students in contexts where English is a foreign language (EFL). The present paper explores the lexical development of Arab undergraduates at a Saudi University where EFL is the medium of instruction. The study employed a quantitative methodology. The lexical knowledge of 150 participants from different college years and fields of specialization was assessed both receptively and productively. The assessment focused on the participants' knowledge of the General Service List (GSL) and the Academic Word List (AWL) due to their prime importance for lexical competence in English. The results confirmed earlier findings that the lexical competence of EFL Arab university students is below the required level for coping with the demands of studying in an English-medium university. Findings also showed that production-based instruction may accelerate lexical development on the short-term, but on the long-term both input-based and production-based instruction support lexical development of EFL learners. The study concludes that lexical development of EFL learners needs to be carefully assessed to ensure the learners' ability to cope with the lexical demands of their educational programs. Hence, the study highly emphasizes the importance of enhanced English language support for students at all levels in Saudi universities.