By employing visual lexical decision and functional MRI, we studied the neural correlates of morphological decomposition in a highly inflected language (Finnish) where most inflected noun forms elicit a consistent processing cost during word recognition. This behavioral effect could reflect suffix stripping at the visual word form level and/or subsequent meaning integration at the semantic-syntactic level. The first alternative predicts increased activation for inflected vs. monomorphemic words in the left occipitotemporal cortex while the second alternative predicts left inferior frontal gyrus and/or left posterior temporal activation increases. The results show significant activation effects in the latter areas. This provides support for the second alternative, i.e., that the morphological processing cost stems from the semantic-syntactic level.