Much research has explored how spoken word recognition is influenced by the architecture and dynamics of the mental lexicon (e.g., Luce and Pisoni, 1998; McClelland and Elman, 1986). A more recent question is whether the processes underlying word recognition are unique to the auditory domain, or whether visually perceived (lipread) speech may also be sensitive to the structure of the mental lexicon (Auer, 2002; Mattys, Bernstein, and Auer, 2002). The current research was designed to test the hypothesis that both aurally and visually perceived spoken words are isolated in the mental lexicon as a function of their modality-specific perceptual similarity to other words. Lexical competition (the extent to which perceptually similar words influence recognition of a stimulus word) was quantified using metrics that are well-established in the literature, as well as a statistical method for calculating perceptual confusability based on the phi-square statistic. Both auditory and visual spoken word recognition were influenced by modality-specific lexical competition as well as stimulus word frequency. These findings extend the scope of activation-competition models of spoken word recognition and reinforce the hypothesis (Auer, 2002; Mattys et al., 2002) that perceptual and cognitive properties underlying spoken word recognition are not specific to the auditory domain. In addition, the results support the use of the phi-square statistic as a better predictor of lexical competition than metrics currently used in models of spoken word recognition.