Awareness in derivational morphology is the ability to manipulate derived words, recognize relationships between different morphological forms of a word, and produce new derivations of words. The current study attempted to investigate the impact of morphological instruction on awareness in relational, syntactic and distributional aspects of derivational morphology, and in turn its effects on reading comprehension among intermediate EFL learners. The participants were 129 lower-higher intermediate students, randomly assigned into experimental and control groups. The study had a pretest-posttest quasi-experimental control group design. The results demonstrated that the experimental groups outperformed the control groups on all three tasks assessing aspects of derivational morphology and reading comprehension tests demonstrating the positive effects of morphological instruction. The treatment benefited the higher level to a greater degree in reading comprehension, but concerning aspects of derivational morphology, the lower level had better improvements. It is concluded that the treatment is more effective for lower levels of proficiency at sub-lexical, but concerning higher levels of proficiency, it is more beneficial at supra-lexical level. The results also demonstrate that reading comprehension is correlated with aspects of derivational morphology and the strongest correlation was observed with distributional aspect.