In this study we asked whether nonwords created by transposing two phonemes (/biksɔt/) are perceived as being more similar to their base words (/biskɔt/) than nonwords created by substituting two phonemes (/bipfɔt/). Using the short-term phonological priming and a lexical-decision task, Experiment 1 showed that transposed-phoneme nonword primes lead to shorter RTs on the target base words than substituted-phoneme nonword primes. Using a single-presentation lexical-decision task, Experiment 2 showed that transposed-phoneme nonwords lead to longer “no” decision responses than substituted-phoneme nonwords. In both Experiments 1 and 2, the transposed-phoneme effect was observed when the transposed phonemes were adjacent (/biksɔt/-/biskɔt/) but not when they were distant (/ʃoloka/-/ʃokola/). Our findings suggest that nonwords created by transposing adjacent phonemes in real words generate more activation of the lexical representations associated with the base words than do matched control nonwords. More generally, our findings present a challenge for models of spoken word recognition that code for the precise order of speech segments