It is by now well established that teacher characteristics play a major role in the way high stakes tests impact education (Alderson and Hamp-Lyons, 1996). What remains an open question, however, is specifying the type of characteristics that have the potential to moderate the backwash effects of tests. This study was designed to isolate the effects of teachers' assessment literacy in moderating the washback effects of summative tests in the EFL context of Iran. A test of assessment literacy and a questionnaire on English language teaching practices were administered to 53 EFL secondary school teachers. Results show that teachers are suffering from a poor knowledge base in assessment and no matter how assessment literate they are; they do tailor their English teaching and testing to the demands of external tests. However, more assessment literate EFL teachers seem to be more likely to include non-washback practices in their English teaching. The implications for teacher training and teachers' professional development programs are then discussed.