This study was motivated by current interest in computer-assisted language learning and was undertaken specifically to investigate the question of whether hypertext referencing of computerized texts facilitates both foreign language reading comprehension and vocabulary acquisition. Advanced university-level EFL students in Israel participated in the study. Results of the repeated measures research design showed that neither of two on-line reading conditions with hypertext links (with access to hypertext glosses or with access to a hypertext dictionary) had a statistically significant advantage over the third on-line reading condition (with access to a paper dictionary) in terms of students’ overall reading comprehension or their short-term or delayed vocabulary retention. However, in both the on-line gloss and the on-line dictionary conditions, students looked up significantly greater numbers of words than in the paper dictionary condition. The results are discussed along with interview data showing students’ preferences for the on-line dictionary.