A study examined the role of grammar instruction in second language (L2) learning by investigating: (1) whether L2 learners significantly improved their language skills after formal grammar instruction, (2) to what extent grammatical knowledge predicted a learner's next level of overall language proficiency, (3) to what extent grammatical knowledge is related to the four language skills (listening, speaking, reading, writing), and (4) to what degree learners at different levels of overall language proficiency differ in the way they benefit from grammar instruction. Subjects were 242 young adult students enrolled in a university English-as-a-Second-Language (ESL) program. Results suggest that the students improved significantly after formal instruction, and that grammatical knowledge is a significant predictor of the students' readiness for the next course level. In addition, grammatical knowledge seems to be a significant component in mastering the four language skills, and students at the beginning level of overall language proficiency gain more on the overall test score than do students at the intermediate or advanced level. However, the grammar competence level and interaction between the overall language proficiency level and grammar competence level could not explain the gain in overall test score. (Author/MSE)