ABSTRACT The visual processing of morphologically complex words has been studied for decades now. One influential account proposes initial sublexical parsing, based on surface structure, before semantic information comes in (form-first models; Rastle & Davis, 2008, Morphological decomposition based on the analysis of orthography. Language and Cognitive Processes, 23(7-8), 942–971. https://doi.org/10.1080/01690960802069730). We tested this account in German, a morphologically rich language in a masked-priming lexical decision study with (pseudo-)derived German words. Behavioural data showed masked priming for truly morphologically complex (e.g. farmer – FARM), but not for pseudo-complex (e.g. corner – CORN) or merely form-related primes (e.g. cartel – CAR). MEG data revealed an early sensitivity to form (140–330 ms), followed by a differentiation between derived and other primes (260–480 ms), challenging the notion of early blind decomposition. The results align with the AUSTRAL model (Taft, 2023, Localist lexical representation of polymorphemic words. In D. Crepaldi (Ed.), Linguistic morphology in the mind and brain (1st ed., pp. 152–166). Routledge. https://doi.org/10.4324/9781003159759-11) and suggest that German speakers have heightened sensitivity to morpho-semantic information, unlike English speakers, which likely due to differences in morphological complexity between languages.