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When a nonword is created from a real word by transposing two medial letters (e.g., oeby from obey), the former is confused with the latter more than when the transposition involves the initial letter (e.g., boey). This is called the “transposed-letter (TL) Position” effect. It is shown here that the addition of a prefix eliminates the TL Position effect (i.e., disboey shows as much interference as disoeby relative to a nontransposed control). The TL Position effect also disappears if the prefix creates a nonword when added to the stem (e.g., reboey shows as much interference as reoeby), but there is no interference at all when a nonprefix is added to the stem instead (e.g., raboey or raoeby). The fact that there is strong TL interference for prefixed nonwords (e.g., reboey and reoeby) strongly points to unavoidable morphological decomposition. The disappearance of the TL Position effect when a prefix is added to the stem is ascribed to the reduction in perceptual salience for the initial letter, and this is confirmed when the TL Position was also shown to disappear when the prefix was replaced by digits. The results of the five experiments lead to a consideration of the way in which models of orthographic processing might handle both TL interference and morphological decomposition.
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