The purposes of this research were to: 1) study whether the use of literature activities improved EFL students' reading skills and critical thinking skills according to CEFR at C1 level; 2) investigate students' critical thinking skills in studying a literature course; and 3) examine students' attitudes towards the use of literature activities in developing reading skills and critical thinking skills. The sample consisted of 47 second-year English major students who were enrolled in the Introduction to Literature Course in the academic year 2020 at a public university in the northern part of Thailand. The instruments included five lesson plans using literature activities to develop reading skills and critical thinking skills, a reading test, a reflective writing task, and a list of semi-structured interview questions. T-test, mean, and standard deviation calculations including content analysis were used for data analysis. This study found that the EFL students' reading skills and critical thinking skills improved significantly following participation in literature activities based on Reader-Response theory. The EFL students demonstrated average level critical thinking skills and they held positive attitudes towards the use of literature activities for developing reading skills and critical thinking skills.