Deadjectival nominals with -sa and -mi in Japanese are both phonologically transparent and morphologically decomposable. However, whilst -sa essentially serves to form nouns out of adjectives, -mi forms function as semantic labels with specific meanings. We examined -sa and -mi nominals in three experiments, an eye-movement experiment presenting -sa and -mi forms in sentence contexts and in two word recognition experiments using (primed and unprimed) lexical decision, to investigate the nature of their form-level representations. Whilst the word recognition experiments produced the same pattern of results for -sa and -mi forms, the eye-movement experiment demonstrated clear differences: -mi forms elicited longer reading times compared to -sa forms, except when the particular meanings of -mi forms were contextually licensed. These results show how different semantic properties affect the performance of derived words that have the same type of word level representation.Derived words have linguistic properties of both lexical entries and combinatorial grammatical processes. On the one hand, the products of derivational processes take on a linguistic life of their own in that they typically have their own grammatical properties and meanings, much like morphologically simplex words which have particular meanings and forms stored in lexical entries. On the other hand, derived words have internal morphological structure, which is arguably a result of rule-like grammatical operations. Consider, for example, deadjectival nouns such as agility, reality, curiosity. Although -ity formations are largely unproductive, lexically restricted to adjectives of Latin or Greek origin, and convey 148 Harald Clahsen and Yu Ikemoto abstract meanings that are not always predictable from their component parts, -ity derivation yields a morphologically structured word form consisting of an adjectival stem with a shortened penultimate vowel (compare agile -agility) and a segmentable suffix.The present study investigates the precise interplay of whole-word level and morphologically structured representations during the processing of derived words. It also contributes to experimental research on derivational morphology across typologically different languages, by providing new experimental findings from Japanese, a non-Indo-European language with purely agglutinating morphology. The specific case we examined, -sa and -mi nominalizations in Japanese, is particularly advantageous for the purpose of this study, as these two derivational processes have identical form-level but different semantic/functional properties. On the basis of results from different experiments which test the recognition of derived words both as single word forms and in sentential contexts, we show how meaning-related properties of derived words affect their online processing and how these can be dissociated from effects of their form-level representations.