The masked repetition effect is used in an attempt to decide whether information about the meaning of newly acquired words is initially represented in lexical memory, or in some nonspecialized memory system. It is shown that masked repetition produces an immediate priming effect when the meaning of obsolete words such as holimonth is explained, and subjects are required to respond ‘yes’ to such items in a lexical decision task. However, it is also shown that priming effects can be produced for both words and nonwords in an episodic recognition memory task, indicating that both lexical and nonlexical representations are capable of being primed. Such effects are confined to positive (‘old’) items, indicating a distinction between lexical and nonlexical representations of words. It is also shown that priming effects are obtained in a categorization task for both positive and negative responses, whereas frequency effects are not. These findings are interpreted within the framework of a modular theory of cognitive processes.