Neighborhood frequency is a crucial variable to know the nature of word recognition. Different from alphabetic scripts, neighborhood frequency in Chinese is usually confounded by component character frequency and neighborhood size. Three experiments were designed to explore the role of the neighborhood frequency effect in Chinese and the stimuli were all two-character words. This effect was evaluated on targets with- and without-higher frequency neighbors with neighborhood size matched. Among the experiments, the patterns of the leading character frequency effect and word frequency effect in the naming and lexical decision tasks were compared. The results implied an inhibitory neighborhood frequency effect in Chinese word recognition. Accordingly, a possible cognitive mechanism of the neighborhood frequency effect was thus proposed.