Visual crowding, generally defined as the deleterious influence of clutter on visual discrimination, is a form of inhibitory interaction between nearby objects. While the role of crowding in reading has been established in psychophysics research using rapid serial visual presentation (RSVP) paradigms, how crowding affects additional processes involved in natural reading, including parafoveal processing and saccade targeting, remains unclear. The current study investigated crowding effects on reading via two eye-tracking experiments. Experiment 1 was a sentence-reading experiment incorporating an eye-contingent boundary change in which reader's parafoveal processing was quantified through comparing reading times after valid or invalid information was presented in the parafovea. Letter spacing was jointly manipulated to compare how crowding affects parafoveal processing. Experiment 2 was a passage-reading experiment with a line spacing manipulation. In addition to replicating previously observed letter spacing effects on global reading parameters (i.e., more but shorter fixations with wider spacing), Experiment 1 found an interaction between preview validity and letter spacing indicating that the efficiency of parafoveal processing was constrained by crowding and visual acuity. Experiment 2 found reliable but subtle influences of line spacing. Participants had shorter fixation durations, higher skipping probabilities, and less accurate return sweeps when line spacing was increased. In addition to extending the literature on the role of crowding to reading in ecologically valid scenarios, the current results inform future research on characterizing the influence of crowding in natural reading and comparing effects of crowding across reader populations.