The present study examines the impact of neighborhood size (number of other two-character words sharing the same character at the same position) on Chinese lexical processing, along with its joint effects with variables such as character frequency, word frequency, and semantic transparency. Previous factorial experiments have yielded conflicting results that are difficult to reconcile with existing models (Li et al., 2015, 2017). To provide high-powered tests for these theoretically important effects on visual word recognition, we leveraged the megastudy approach and used linear mixed-effect analyses to investigate lexical decision and naming responses to a large pool of two-character Chinese words (N > 17,000) sourced from Tse et al.'s (2017, 2023) database. In all analyses we controlled for extraneous orthographic (e.g., stroke count), phonological (e.g., consistency), and semantic (e.g., transparency) variables. In addition to evaluating Li et al.'s (2015, 2017) models, we also investigated whether the parallel dual-route mechanism, which entails lexical access via whole-word or character decomposition-then-composition, could account for neighborhood size effect and its interactions in lexical decision and naming. Finally, we discuss the implications of our findings on the specificity of lexical effects with regard to character position and lexical processing task. (PsycInfo Database Record (c) 2024 APA, all rights reserved).