Linguistic abilities as well as home environment explain successful English as a foreign language (EFL) reading acquisition. The aim of this study was to examine the extent to which morphological derivational awareness measured in Arabic as a first language (L1) predicted EFL word recognition and reading comprehension among 66-11th grade female high school students from low socioeconomic backgrounds. Measures included L1 phonological awareness, orthographic knowledge, and derivational morphological awareness, as well as EFL word recognition and reading comprehension. Background variables including socioeconomic background measured as home-population density and English exposure out of school measured by time spent viewing English television per day were controlled for. Hierarchical regression analyses found L1 phonological awareness, orthographic knowledge and derivational morphological awareness judgment all directly contributed to EFL word recognition. English home language exposure and derivational morphological awareness production directly predicted EFL reading comprehension, and morphological awareness mediated the connection between L1 phonological awareness, orthographic knowledge and EFL reading comprehension. These results highlight the cross-linguistic role of morphological awareness together with home background on EFL reading for female high school students from low socio-economic backgrounds.