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This study aims to examine which of two tests, the in-house level placement test (LPT)or Test of English for International Communication (TOEIC), is a more legitimate tool for the placement purposes for English reading courses and to see if there is any significant correlation between the two test scores and the course grades. Data collected from 1457 college freshmen were used to investigate the relationship between the LPT and TOEIC, the most commonly used test type for placement purposes in universities in Korea. A post-test was administered to 279 students, a subset of the participants, and the data were analyzed to examine the relationship between the test scores and the course grades. The results revealed that both the LPT and TOEIC scores were significantly different among levels; however, about 50% of the participants were shown to be misplaced when the TOEIC scores were used as the criterion. Each test scores showed a low to a moderate degree of statistical correlation with the course grades but when they were analyzed by level, the LPT and the post-test scores showed quite different results among levels; TOEIC scores were significantly correlated with the grades at all levels. Overall, the analysis revealed that extensive revisions are necessary in order for the LPT to work effectively as a placement test.