Lexical information facilitates speech perception, especially when sounds are ambiguous or degraded. The interactive approach to understanding this effect posits that this facilitation is accomplished through bi-directional flow of information, allowing lexical knowledge to influence pre-lexical processes. Alternative autonomous theories posit feed-forward processing with lexical influence restricted to post-perceptual decision processes. We review evidence supporting the prediction of interactive models that lexical influences can affect pre-lexical mechanisms, triggering compensation, adaptation and retuning of phonological processes generally taken to be pre-lexical. We argue that these and other findings point to interactive processing as a fundamental principle for perception of speech and other modalities. © 2006 Elsevier Ltd. All rights reserved.