The role of semantic transparency in morphological processing in general and in compound processing in particular is examined. It is argued that the notion of semantic transparency is crucial to an account of how compounds are represented and processed in the mind. A sketch of a model is proposed in which compound processing is described in terms of stimulus properties, lexical properties, and conceptual properties. The model represents the notion of semantic transparency in terms of a four-way classification of the semantic relationship between a compound's constituents and the corresponding independent morphemes. It also distinguishes between semantically componential and noncomponential compounds. It is proposed that the model offers a framework within which experimental psycholinguistic findings can be understood and within which aphasic deficits associated with compound processing can be characterized. As an example of this, the paper presents a reanalysis of an aphasic patient who exhibits the tendency to interpret semantically opaque compounds as though they were transparent and to interpret opaque compounds in terms of a blend of constituent and whole-word meaning. It is argued that the underlying deficit in this patient is the failure for inhibition to result from the competition among stimuli at the conceptual level of representation.