The study reported in this paper examined four groups of readers (L2-Intermediate, L2-Advanced, L1-Japanese, and L1-English) when they processed and recalled two passages that varied in degree of causal coherence (Trabasso & van den Broek, 1985). Concurrent verbal reports and recall data were collected. It was found that L1 readers used much of their attention for higher level processes such as the generation of inferences and general knowledge associations. They processed the high- and low-coherence texts differently, generating more elaborations for low-coherence texts than for high-coherence texts. Furthermore, L1 readers generated backward inferences according to the text's causal structure and recalled events with many causal connections more frequently than events with few connections. These findings confirm L1 research findings (Fletcher & Bloom, 1988; Goldman & Varnhargen, 1986; Graesser & Clark, 1985; Singer, 1995; Trabasso & van den Broek, 1985; van den Broek, 1994). On the other hand, L2 readers paid more attention to lower level processes and did not process differently between the high- and low-coherence texts. L2-Advanced readers generated both backward and forward inferences during reading, whereas L2-lntermediate readers did not. Although L2-Advanced readers' generation of backward inferences did not correspond to the text's causal structure, their second recall indicated they were sensitive to it. A closer look at the data suggests that there were some delays in lower level processes such as understanding words and sentences, as well as resolution of anaphoric relations by these readers.