This dissertation investigates the cognitive relevance of Arabic morphology and diglossia in spoken word recognition. The current study asks four main questions: (1) Does Arabic morphology influence word recognition? (2) Which view of Arabic morphology (i.e., the root-based or the stem-based) has an online role in spoken word recognition? (3) Does Arabic diglossia (i.e., using colloquial Arabic (CA) and Modern Standard Arabic (MSA) as the dominant language of speaking and literacy, respectively) affect spoken word processing? (4) How can Arabic diglossia affect spoken word recognition? Three different lexical decision experiments and one phoneme-monitoring task were designed and conducted on a group of 140 literate native speakers of Jordanian colloquial Arabic (JCA). In the first experiment, the participant responded to MSA words varied in their surface, root, and stem frequencies. Results revealed that the token frequencies of the three tested units affected the speed of word recognition to the same extent. This suggests that both roots and stems, along with the surface words, are valid units of Arabic mental lexicon. The next two experiments compared the processing of JCA and MSA words when embedded in sentences of the same or the other variety of Arabic and when primed by intra-variety vs. cross-variety words. Results showed a lexical switching cost only when the target word is processed in the sentential context. Moreover, while the sentence experiment reported a processing advantage for MSA words relative to JCA words, the priming experiment found a processing advantage for JCA words. The priming effects were larger when the related primes were presented in JCA relative to the priming effects of the MSA primes. The fourth experiment compared phoneme monitoring of consonants and short vowels in JCA and MSA words. Results showed a detection advantage for consonants relative to short vowels and no difference between the carrier words of the two varieties of Arabic. On the whole, the last three experiments suggest that both spoken language (i.e., CA) experience and literary language (i.e., MSA) experience can affect auditory word recognition. This work emphasizes the relevance of (alphabetic) literacy and experimental task in speech processing.