This introduction sets the stage for the papers making up this special issue. Its focus is on two major problems in the study of lexical processing—determining the phases involved in recognising a spoken word and identifying the nature of different types of contextual influences on these phases. An attempt is made to decompose the process of recognising a word into phases which have both theoretical and empirical consequences. A similar analytic approach is taken in the discussion of the problem of context effects by distinguishing qualitatively different types of context (lexical, intra-lexical, syntactic, semantic, and interpretative). We argue that such an approach is necessary to make explicit the relationship between a particular type of contextual information and the phase(s) of processing at which it has its impact.