Inferring unknown word meanings by using contextual clues is a common strategy employed by EFL learners during reading. This study aims to (a) investigate the effect of familiarity on lexical inferences in EFL reading; (b) examine inference efficiency among EFL readers with different levels of vocabulary knowledge and reading proficiency; and (c) use eye-tracking to reveal the effect of lexical inferences on EFL reading rate. According to the eye movement data acquired from 72 EFL learners, accurate inferences and learning gains were driven by vocabulary knowledge and reading proficiency. Moreover, while correct inference rate and learning gains were significant; employing this strategy had a degenerative effect on EFL reading rate. Second pass time and I-WPM were also found to be consistent with previous studies.