This study investigates the effect of Iranian EFL students' proficiency level on their ability in identifying paragraph boundaries of unparagraphed expository texts and in producing paragraph boundaries in their own L2 expository writings. Further, this study seeks the correlation between advanced and intermediate learners' ability to identify and produce paragraph boundaries. On the basis of their scores on the general proficiency test of Michigan, intermediate and advanced EFL students studying in the English department of University of Isfahan participated in receptive and productive tasks. The results of data analysis indicate that proficiency is connected with paragraph perception, a fact more observable in productive performance; at advanced levels, students seem to be more skillful in the appropriate boundary placement. Moreover, identification performance has a positive medium correlation with production in the case of both advanced and intermediate groups of EFL learners.