The present continuous tense can be problematic among L1 Thai learners due to the variation in contexts in which the tense can be used (Boonjoon, 2017; Khattiya, 2018; Kongthai, 2015). The present study aimed to examine the functional use of the English present continuous tense by L1 Thai learners under the theoretical framework of the Interlanguage Hypothesis (Selinker 1972; Tarone 2006). The functions investigated in this study included instantaneous, continuous, temporary, habitual, and future based on the categorization of Eastwood (1994). A Grammaticality Judgement Test (GJT) assessing perception, a fill-in-the-blank test focused on production, and interviews were employed to elicit data from 30 L1 Thai learners of the intermediate proficiency level. The results revealed the learners' low accuracy rates in some functions, in both perception and production tasks. The accuracy rate in the production task was significantly lower than that in the perception task (p < 0.001). Among all the functions, the future and instantaneous functions scored at high rates in both the GJT and fill-in-the-blank tests, while continuous, habitual, and temporary functions scored at low rates. The reasons were overgeneralization of rules and a lack of emphasis on some functions. The interlanguage data from both tests, as well as data from the interviews, can be explained by L2 learners' L1 transfer, overgeneralization of rules, and transfer of training, in accordance with the Interlanguage Hypothesis, confirming the hypotheses of this study. This research contributes to the body of knowledge on L2 learners' challenges with respect to the functions of the English present continuous tense.