Prior research points to efficient identification of embedded words as a key factor in facilitating the reading of text printed without spacing between words. Here we further tested the primary role of bottom-up word identification by altering this process with a letter transposition manipulation. In two experiments, we examined silent reading and reading aloud of normal sentences and sentences containing words with letter transpositions, in both normally spaced and unspaced conditions. We predicted that letter transpositions should be particularly harmful for reading unspaced text. In line with our prediction, the majority of our measures of reading fluency showed that unspaced text with letter transpositions was disproportionately difficult to read. These findings provide further support for the claim that reading text without between-word spacing relies principally on efficient bottom-up processing, enabling accurate word identification in the absence of visual cues to identify word boundaries.