Given the lack of spaces between words in Chinese text, Chinese readers must parse these characters into words using their word knowledge. In this situation, are the characters belonging to a single word or to different words understood via different character-order encoding processes? In this study, we explored the effects of word boundaries in Chinese text on character-order encoding. We used four-character words (the one-word condition) and two two-character words (the two-word condition) as our targets. We embedded the target words into sentences and then manipulated the previews of the words using the boundary paradigm. The preview was identical to the target word (identity condition), had the two middle characters of the target word transposed (TC condition), or had two middle characters that were different from those in the target word (SC condition). Fixation durations on the target word in the TC condition were much longer than those in the identity condition for the two-word condition, but they were not significantly different for the one-word condition. Furthermore, for the one-word condition, gaze durations were longer in the SC than in the TC condition, whereas for the two-word condition, the difference between the TC and SC conditions was not significant. Word boundaries were found to affect the character-order encoding in Chinese reading, further suggesting the early occurrence of word segmentation.