Abstract. We show that loanword adaptation can be understood entirely in terms of phonological and phonetic comprehension and production mechanisms in the first language. We provide explicit accounts of several loanword adaptation phenomena (in Korean) in terms of an Optimality-Theoretic grammar model with the same three levels of representation that are needed to describe L1 phonology: the underlying form, the phonological surface form, and the auditory-phonetic form. The model is bidirectional, i.e., the same constraints and rankings are used by the listener and by the speaker. These constraints and rankings are the same for L1 processing and loanword adaptation. Figure 1 shows a simplified version of an existing model for first-language (L1) processing (Boersma 1998(Boersma , 2000.1 The model is bidirectional, i.e., it accounts for the behaviour of the listener (on the left) as well as the speaker (on the right). In both directions, processing is assumed to be handled by the interaction of OptimalityTheoretic constraints. Phonological production (top right) is described in terms of an interaction between structural and faithfulness constraints (McCarthy & Prince 1995). Perception (bottom left) is described in terms of an interaction between structural and cue constraints (Boersma 2000. The remaining two processes, word recognition (top left) and phonetic implementation (bottom right), are (in this simplified version) described by one set of constraints each (faithfulness and cue constraints, respectively).