Sentence-level grammar skills are of the important foundations in the mastery of reading skills in second language (L2). Previous studies showed inconclusive findings about the effect of grammar knowledge on L2 reading. This study examines the relationship between L2 reading outcomes and reader-based grammar knowledge as it is moderated by text-based features of vocabulary difficulty. Participants were EFL students (n = 71) in the second year of their English major at an Indonesian university. The participants' grammar knowledge was measured using a test of sentence-level grammatical knowledge. Text-based vocabulary difficulty was assessed using VocabProfile software (Cobb, 2010). During the data collection period, the participants completed four reading texts, each reflecting a unique combination of two levels (high vs. low) of lexical frequency. This study reveals that reader grammar knowledge influenced L2 reading outcomes. It also shows that text vocabulary difficulty significantly moderated the relationship between reader grammatical knowledge and L2 reading, indicating that the relationship between grammar knowledge and L2 reading for high lexical frequency texts was significantly greater than for low lexical frequency texts. [This article is based on a paper presentation at the 65th TEFLIN International Conference at Universitas Negeri Makassar on 12-14 July 2018.]