We investigated whether adult learners' knowledge of phonotactic restrictions on word forms from their first language impacts their ability to use statistical information to segment words in a novel language. Adults were exposed to a speech stream where English phonotactics and phoneme co-occurrence information conflicted. A control where these did not conflict was also run. Participants chose between words defined by novel statistics and words that are phonotactically possible in English, but had much lower phoneme contingencies. Control participants selected words defined by statistics while experimental participants did not. This result held up with increases in exposure and when segmentation was aided by telling participants a word prior to exposure. It was not the case that participants simply preferred English-sounding words, however, when the stimuli contained very short pauses, participants were able to learn the novel words despite the fact that they violated English phonotactics. Results suggest that prior linguistic knowledge can interfere with learners' abilities to segment words from running speech using purely statistical cues at initial exposure. (Contains 4 figures.)