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This study examined children’s use of morphological information in decoding morphologically complex words. We compared effects of semantic transparency and phonological transparency? We found an effect of phonological transparency in response times and accuracy, with faster response times and higher accuracy to morphologically complex words that were phonologically. There was also a significant effect of semantic transparency in the response time data, but surprisingly, response times were slower to morphologically complex words that were semantically transparent. Significant interactions revealed that the effect of phonological transparency held only for semantically opaque words, with no difference for semantically transparent words. Clearly, the facilitation due to phonological transparency does not depend on the reader recognizing the semantic relationship between base and derived form.