The paper attempts to compare the status of palatalization of consonants in Modern Irish and Polish within the phonological and morphological systems of the two languages. Irish and Polish have been selected from the Celtic and Slavic groups due to the fact that both have palatalized consonants. One function, which is connected with the palatalized / non-palatalized distinction is expressing lexical contrast, e.g. Irish cúis [ku:ʃ] ‘reason’ vs. ciumhais [kʲu:ʃ] ‘edge’ and Polish beli [beli] ‘roll, Gen.sg.’ vs. bieli [bʲeli] ‘whiteness, Gen.sg.’. Phonologically speaking, the term ‘palatalization’ is rather broad and ambiguous, as it subsumes two quite disparate linguistic situations. Namely, it may be understood as a dynamic phonetic or phonological process of fronting or softening a consonant in the context of the following front vowel [i/e] or glide [j]. In this sense, palatalization is allophonic, that is, a context dependent assimilatory process, as may be the case with Irish bith [bʲi] ‘existence’, or Polish bił [bʲiw] ‘he beat’. On the other hand, both Irish and Polish seem to show that palatalization of consonants may also be independent of the context, in which case we are not dealing with a process, but with a genuine lexical property of given consonants, that is, a phonemic distinction. This point can be illustrated by such forms as Irish beo [bʲo:] ‘alive’ and Polish biodro [bʲodro] ‘hip’. Here the palatalized consonant is followed by a back vowel and could not have been derived by assimilation. Another argument for the phonemic status of palatalization in the two languages comes from the forms in which the presence of a front vowel does not guarantee that a consonant will be palatalized, e.g. Irish tuí [ti:] ‘straw’ (cf. tí [tʲi:] ‘house, Gen.sg.’) and Polish beli [beli] ‘roll, Gen.sg.’. It may appear that the phonological similarities between Irish and Polish palatalization are considerable. However, the appealing picture becomes more complicated when the two systems are looked at in detail. Once present in the phonological representation of words, the property of palatalization in Irish behaves quite disparately from what is observed in Polish. In Irish, palatalization behaves as an independent property (autosegment) and has a tendency to spread leftwards, affecting the preceding short vowels, e.g. sop / soip [sop / sipʲ] ‘wisp / Gen.sg’, consonants and vowels, e.g. olc / oilc [olk / ilʲkʲ] ‘evil / Gen.sg.’, or even entire syllables, e.g. dorn / doirn [dorən / dirʲinʲ] ‘fist / Gen.sg.’. Thus, palatalization as an assimilatory process is not entirely inactive. On the other hand, in Polish, there is some vestigial consonant-vowel interaction, practically limited to velar consonants, as well as some cluster assimilation. The paper aims to define the conditions on the phonological scope of palatalization in Irish and Polish from the point of view of the historical origin of the phenomenon, distributional restrictions, and participation in processes. Both languages successfully utilize the palatalized / non-palatalized distinction also in the respective morphological systems. This general similarity has a historical origin in the loss of final syllables. The paper surveys various lexical derivations and inflectional paradigms involving palatalization in Irish and Polish. From the formal point of view, there seem to be two main ways in which the palatalized / non-palatalized distinction is utilized morphologically, each of which has two subcategories: 1. Palatalization a. as a sole formative: C > Cʲ, e.g. Irish bád / báid [bɑ:d / bɑ:dʲ] ‘boat, Nom.sg. / Nom.pl.’, and Polish ryb-a / rybi-a [rɨba / rybʲa] ‘fish, Nom.sg. / adj.Nom.sg.fem.’. b. as a co-formative: C > Cʲ+vowel, e.g. Irish deas / deise [dʲas / dʲeʃə] ‘nice / Gen.sg.’, and Polish student / studenc-i [student / studeɲtɕi] ‘student, Nom.sg. / Nom.pl.’. 2. De-palatalization a. as a sole formative: Cʲ > C, e.g. Irish athair / athar [ahir / ahər] ‘father, Nom.sg. / Gen.sg.’. b. as a co-formative: e.g. Polish liść / list-ek [liɕtɕ / listek] ‘leaf / dim.’ From the functional viewpoint, these effects are seen, in Polish, in some paradigms of nominal inflection, the derivation of abstract nouns from adjectives and of possessive denominal adjectives, as well as in large areas of expressive word-formation, etc. In Irish, the morphological impact of palatalization is best observed in the nominal inflection, but it also present in verbal inflection and some derivations, e.g. Verbal Nouns. Further cross-linguistic comparison and typological research is called for in order to fully appreciate the status of palatalization as a link between phonology and morphology. This paper attempts to lay the foundations for such research.