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Mild cognitive impairment (MCI) affects the cognitive performance of elderly adults. However, the level of severity is not high enough to be diagnosed with dementia. Previous research reports subtle language impairments in individuals with MCI specifically in domains related to lexical meaning. The present study used both off-line (grammaticality judgment) and on-line (lexical decision) tasks to examine aspects of lexical processing and how they are affected by MCI. 21 healthy older adults and 23 individuals with MCI saw complex pseudo-words that violated various principles of word formation in Slovenian and decided if each letter string was an actual word of their language. The pseudo-words ranged in their degree of violability. A task effect was found, with MCI performance to be similar to that of healthy controls in the off-line task but different in the on-line task. Overall, the MCI group responded slower than the elderly controls. No significant differences were observed in the off-line task, while the on-line task revealed a main effect of Violation type, a main effect of Group and a significant Violation × Group interaction reflecting a difficulty for the MCI group to process pseudo-words in real time. That is, while individuals with MCI seem to preserve morphological rule knowledge, they experience additional difficulties while processing complex pseudo-words. This was attributed to an executive dysfunction associated with MCI that delays the recognition of ungrammatical formations. [ABSTRACT FROM AUTHOR]