Grades represent one of the most common sources of evidence of student achievement in classrooms, though their relationship with test scores has remained understudied, particularly in settings such as in Iran, where English is taught as a foreign language. The purpose of this study was to investigate the relationship between graded and tested achievement with respect to gender and proficiency level differences. Teacher-assigned grades and standardized achievement test scores of 693 Iranian learners of English taught by 15 teachers were examined. Primary analyses focused on the validity of teacher grades and the subsequent Pearson correlation coefficients revealed that grades associated positively with externally-validated test scores obtained from reliable tests, an indication of the validity of teacher grading. Additionally, the results of independent-samples t-tests showed that female students outperformed male students on achievement tests, but with fluctuations across proficiency levels. Higher proficiency levels gave male participants an advantage over female participants in achievement tests. Moreover, male teachers were found to grade female participants more accurately than their female counterparts. Implications are discussed for informing teachers about the validation of their grading practices, as well as for teacher education programs and teachers’ professional development.