Mobile phones as new addition to information and communication technologies have created new ways to help learners in the process of foreign language learning. Given the importance of academic vocabularies for university students, this study tried to investigate the effectiveness of SMS on Iranian university students' vocabulary learning and retention. To this end forty five university freshman students with upper intermediate proficiency level were chosen to take part in this study. During 16 weeks of experiment, the participants of the experimental group (N = 28) were taught 320 head words from the Academic Word List (Coxhead, 2000) via SMS. During the same period of time the participants of the control group (N = 17) were taught the same words by using dictionary. At the end, both groups were given a vocabulary test from Academic Word List, to see the effect of SMS on their vocabulary learning and the scores of each group were compared employing an independent t-test. The result of the t-test showed that both groups had improved in the post-test. Although there was not any significant difference between the groups in the post-test, the result of the delayed post-test showed that SMS had more significant effect on vocabulary retention compared to using dictionary, and the experimental group outperformed the control group. The result of this study can have pedagogical implication for language teachers, in that they can use SMS as a useful way to help their students to retain vocabularies in their long-term memory.