Source use competence is becoming increasingly important in English-medium universities, and inability to appropriately use reading sources leads to plagiarism which has serious punishable consequences. As one effective strategy to help academic writers to avoid plagiarism, paraphrasing is highly recommended for students to master. However, studies on paraphrasing are product-oriented, and few examined the processes and strategies of paraphrasing. The elusive construct of paraphrasing exerted a negative influence on the instruction and assessment of paraphrasing. Only specific paraphrasing strategies were examined in prior studies, and little has been done on more general strategies like cognitive and metacognitive strategies. Moreover, as for the studies of learner strategy and language performance, no consensus has been reached about the relationship between strategy use and language performance. Prior studies mainly adopted Purpura’s questionnaire (1997) with cognitive and metacognitive strategies excluding other important learner strategies, and prior studies mainly examined language performance in non-integrated tasks. Questionnaire and interview were employed in previous studies, but few has adopted think-aloud protocols to capture test takers’ online cognitive processes. To address the research gap, the present study purports to shed light on the cognitive processes and strategy use in the paraphrasing task with the method of think-aloud protocols and strategy use questionnaire. A total of 212 first-year non-English-major college students were recruited to respond to a seven-item paraphrasing task. Think-aloud protocol was conducted to capture test takers’ thinking processes while responding to the task. In addition, test takers’ strategy use in paraphrasing was elicited by a paraphrasing strategy use inventory. Findings of the study are as follows: test takers employed numerous strategies including cognitive, metacognitive, compensation, and affective strategies with a variety of sub-strategies; metacognitive strategies are significantly correlated with cognitive strategies; more proficient test takers used a smaller number of strategies and more metacognitive strategies. However, structural equation modeling analysis reported that all those strategies exert a negligible effect on participants’ paraphrasing performance. Other factors which might contribute to the language performance were analyzed, including language knowledge, test methods, personal attributes, and errors of measurement.