Can "words" be processed as integrated units?

Three experiments examined the information processing of letters embedded within one-syllable words and similar unpronounceable sequences. A speeded discrimination task was used to detect processing differences between words and nonwords in a situation where both the identity and position of critical display information was known to subjects before stimulus presentation. Results indicated that word pairs differing by two letters were more quickly discriminated than two words differing in a single letter, while nonword pairs differing in two letters were discriminated no faster than two nonwords differing in a single letter. A further comparison showed a performance advantage for words over nonwords in a condensation task that forced a scan of stimulus letters for correct responding. These results suggest that familiarity affects information processing at a perceptual level, and are incompatible with theories suggesting that familiarity effects are due to inferential factors following letter feature analysis.