When does morphological decomposition occur in visual word recognition? An increasing body of evidence suggests the presence of early morphological processing. The present work investigates this issue via an orthographic similarity manipulation. Three masked priming lexical decision experiments were conducted to examine the transposed-letter similarity effect (e.g., "jugde" facilitates "JUDGE" more than the control "jupbe") in polymorphemic and monomorphemic words. If morphological decomposition occurs at early stages of visual word recognition, we would expect an interaction with transposed-letter effects. Experiment 1 was carried out in Basque, which is an agglutinative language. The nonword primes were created by transposing two letters that either crossed the morphological boundaries of suffixes or did not. Results showed a transposed-letter effect for non-affixed words, whereas there were no signs of a transposed-letter effect across morpheme boundaries for affixed words. In Experiment 2, this issue was revisited in a non-agglutinative language (Spanish), with prefixed and suffixed word pairs. Again, results showed a significant transposed-letter effect for non-affixed words, whereas there were no signs of a transposed-letter effect across morpheme boundaries for affixed words (both prefixed words and suffixed words). Experiment 3 replicated the previous findings, and also revealed that, for polymorphemic words, transposed-letter priming effects occurred for within-morpheme transpositions. Taken together, these findings support the view that morphological decomposition operates at an early stage of visual word recognition.