To investigate the interaction in speech perception of auditory information and lexical knowledge (in particular, knowledge of which phonetic sequences are words), acoustic continua varying in voice onset time were constructed so that for each acoustic continuum, one of the two possible phonetic categorizations made a word and the other did not. For example, one continuum ranged between the word dash and the nonword tash; another used the nonword dask and the word task. In two experiments, subjects showed a significant lexical effect--that is, a tendency to make phonetic categorizations that make words. This lexical effect was greater at the phoneme boundary (where auditory information is ambiguous) than at the ends of the condinua. Hence the lexical effect must arise at a stage of processing sensitive to both lexical knowledge and auditory information.