Since corpus linguistics gained popularity as a methodology in the latter half of the 20th century, second language acquisition research has seen the emergence of work investigating formulaic language, such as idioms, lexical bundles, and collocations. A collocation is a string of words that co-occur more routinely than probability would predict, and can be considered as an existing entity beyond the component words (Manning & Schütze, 1999). Although formulaic language processing has been investigated by many researchers, uncertainty exists regarding whether such items are processed holistically as single units, or componentially in the form of the constituent words, with no definitive research having weighted the evidence in either direction.The purposes of the current study are threefold. The first purpose involves conducting research specifically designed to investigate whether L1 and L2 collocational processing is componential or holistic. This issue is important because existing research makes claims based on putative entailments, such as recognition latencies, as opposed to assessing behavior with manipulations that could only produce certain results if processing is holistic. The second purpose involves investigating collocational processing through a unique letter transposition condition that was specifically designed to isolate a holistic processing effect. The third purpose involves assessing data from an experiment designed to investigate collocation processing during orthographic word recognition. Fifty-four adjective-noun collocations and 18 novel pairs were embedded in sentences and presented to L1 and L2 English users in a self-paced reading experiment. The target items were presented in one of three conditions; no transposition (e.g., pretty girl), word transposition (e.g., prtety gril), and phrase transposition (e.g., prettg yirl). Results revealed that phrase transpositions engendered significantly longer reading times than the other conditions, indicating that these manipulations were processed as word-final and word-initial substitutions as opposed to a single phrase-internal transposition. Thus, the results indicated that the collocations were most likely processed componentially as two separate words. These findings have implications for collocation processing theory by suggesting that future models should consider collocations as being componentially processed at the orthographic, word recognition stage, and that the faster reaction times observed in previous studies should be considered in terms of an entrenchment continuum as opposed to evidence of holistic processing. / Teaching & Learning