The phonological similarity effect (PSE) in immediate serial recall (ISR) refers to the finding that phonologically similar items, such as mad cap cat, generally are more difficult to recall in the correct order than are phonologically distinct items, such as cow bar pen. This effect was first reported by Conrad and Hull (1964) and has since been widely acknowledged in the experimental literature (Baddeley, 1986;Burgess & Hitch, 1992;Longoni,Richardson,& Aiello, 1993;Nairne, 1990;Schweickert, 1993;Schweickert, Guentert, & Hersberger, 1990). Nairne and Kelley (1999) considered PSE to be a benchmark fact of ISR, Gathercole (1997) referred to PSE as one of the key empirical findings that affords a challenge to any model of short-term memory, and Page and Norris (1998) argued that an explanation of PSE is an essential test of such models.PSE has been documented with a wide range of materials and procedures that are likely to activate semantic and lexical long-term memory representations. These include the use of letters (Conrad & Hull, 1964), familiar words (Baddeley, 1966), pictures (Hitch & Halliday, 1983), auditory presentation (Crowder, 1979;Watkins, Watkins, & Crowder, 1974), visual presentation (Besner & Davelaar, 1982, and paired-associate learning (Papagno & Vallar, 1992). Verbal stimuli that are likely to be perceived as less meaningful or less familiar and that could be interpreted as being less well connected to semantic and lexical longterm memory have not been explored as systematically as other materials have been in the ISR task. Even the most meaningless verbal utterances are likely to activate a variety of long-term memory representations that guide perception and behavior, but the associative value of nonword utterances will generally be lower than that of regular words. That is, the participant will generally need more time to come up with an association to a nonword than to a word (Lian, Karlsen, & Winsvold, 2001).A consonant-vowel-consonant (CVC) combination constitutes a nonword when it does not currently form a whole word in the natural vocabulary of the participant. Nonwords differ with respect to wordlikeness in the sense that they may sound more or less like familiar words and may contain more or less the same phoneme segments as familiar words do. Phonemic segments, lexemes, meanings, and associations are long-term memory representations that people may rely on in order to retain all types of verbal material in primary memory tasks. The functional memory code may differ from case to case, depending on the familiarity and meaningfulness of the material to be remembered, the time available for processing, and other factors (Bartlett, 1932;Neisser, 1982 The phonological similarity effect (PSE) was studied with lists of nonwords in one task of serial recall and one task of serial recognition. PSE was criticallyaffectedby the scoring procedure and the type of phonological similarity involved, and the effect diverged in several ways from the findings of previous studies on words. PSE was absen...