The influence of coarticulation cues on spoken word recognition is not yet well understood. This acoustic/phonetic variation may be processed early and recognized as sensory noise to be stripped away, or it may influence processing at a later prelexical stage. The present study used event-related potentials (ERPs) in a picture/spoken word matching paradigm to examine the temporal dynamics of stimuli systematically violating expectations at three levels: entire word (lexical), initial phoneme (phonemic), or in coarticulation cues contained in the initial phoneme (subphonemic). We found that both coarticulatory and phonemic mismatches resulted in increased negativity in the N280, interpreted as indexing prelexical processing of subphonemic information. Further analyses revealed that the point of uniqueness differentially modulated subsequent early or late negativity depending on whether the first or second segment matched expectations, respectively. Finally, it was found that word-level but not coarticulatory mismatches modulated the later-going N400 component, indicating that subphonemic information does not influence word-level selection provided no lexical change has occurred. The results indicate that acoustic/phonetic variation resulting from coarticulation is preserved in and influences spoken word recognition as it becomes available, particularly during prelexical processing. (Contains 1 footnote, 4 tables, and 9 figures.)