Readers extract information from a word from parafoveal vision prior to looking at it. It has been argued that parafoveal perception allows readers to initiate linguistic processes, but it is unclear which stages of word processing are engaged: the process of extracting letter information to recognize words, or the process of extracting meaning to comprehend them. This study used the event‐related brain potential (ERP) technique to investigate how word recognition (indexed by the N400 effect for unexpected or anomalous compared to expected words) and semantic integration (indexed by the Late‐positive component; LPC effect for anomalous compared to expected words) are or are not elicited when the word is perceived only in parafoveal vision. Participants read a target word following a sentence that made it expected, unexpected, or anomalous, and read the sentences presented three words at a time in the Rapid Serial Visual Presentation (RSVP) with flankers paradigm so that words were perceived in parafoveal and foveal vision. We orthogonally manipulated whether the target word was masked in parafoveal and/or foveal vision to dissociate the processing associated with perception of the target word from either location. We found that the N400 effect was generated from parafoveally perceived words, and was reduced for foveally perceived words if they were previously perceived parafoveally. In contrast, the LPC effect was only elicited if the word was perceived foveally, suggesting that readers must attend to a word directly in foveal vision in order to attempt to integrate its meaning into the sentence context.