This study investigated the relationship between language proficiency and negative pragmatic transfer from a first language (L1), focusing on the speech act of refusal as realised by American learners of Arabic as a Foreign Language (AFL) in Egyptian Arabic. Twenty American AFL learners (10 intermediate and 10 advanced) and 2 baseline groups (10 native speakers of Egyptian Arabic and 10 native speakers of American English) participated in the study. Data were collected using enhanced open-ended role plays, which consisted of six scenarios eliciting refusals of requests and offers in lower, equal and higher status situations. The study is significant because it is the first to examine issues of pragmatic competence and transfer among American learners of AFL. Results showed that both learner groups engaged in negative pragmatic transfer from English with regard to the overall frequency of direct and indirect strategies, individual refusal strategies, strategy use relative to status and discourse-level transfer. The findings also showed that the intermediate learners engaged in negative pragmatic transfer more frequently than their advanced counterparts. Additionally, learners sometimes used patterns that deviated from the norms of both learners' L1 and their target second language (L2).