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In most current models of word recognition, the word recognition process is assumed to be driven by the activation of letter units (i.e., that letters are the perceptual units in reading). An alternative possibility is that the word recognition process is driven by the activation of grapheme units, that is, that graphemes, rather than letters, are the perceptual units in reading. If so, there must be representational units for multiletter graphemes like CH and PH, which play a key role in this process. We examined this idea in four masked priming experiments. Primes were created by transposing, replacing entirely, or removing one component of either multiletter graphemes or two adjacent letters that each represented a grapheme, using both English and Spanish stimuli. In none of the experiments was there any evidence of differential priming effects depending on whether the two letters being manipulated formed a single grapheme or formed two separate graphemes. These data are most consistent with the idea that multiletter graphemes have no special status at the earliest stages of word processing and, therefore, that word recognition is, indeed, driven by the activation of units for individual letters.