Comprehension is perceived to be an essential component in reading. To date a heated research area is the effect of background knowledge on L2 reading comprehension. However, there has been relatively less research using Chinese EFL readers as subjects, whose native language is a writing system that is far different from western languages such as English and French. The present study intends to examine the effect of background knowledge on Chinese EFL reading comprehension. An experiment is designed and conducted among a group of Grade One students in Zhejiang University. It is found that different components of background knowledge have individual effects and interactive effects upon Chinese readers’ EFL reading comprehension. It is also found that interactive reading strategies can make up for deficient contexts and that Chinese as a native language exerts greater influence on poor EFL readers than on proficient EFL readers. With the insights gained from the findings, some important implications are proposed.