Much previous experimental research on morphological processing has focused on surface and meaning-level properties of morphologically complex words, without paying much attention to the morphological differences between inflectional and derivational processes. Realization-based theories of morphology, for example, assume specific morpholexical representations for derived words that distinguish them from the products of inflectional or paradigmatic processes. The present study reports results from a series of masked priming experiments investigating the processing of inflectional and derivational phenomena in native (L1) and non-native (L2) speakers in a non-Indo-European language, Turkish. We specifically compared regular (Aorist) verb inflection with deadjectival nominalization, both of which are highly frequent, productive and transparent in Turkish. The experiments demonstrated different priming patterns for inflection and derivation, specifically within the L2 group. Implications of these findings are discussed both for accounts of L2 morphological processing and for the controversial linguistic distinction between inflection and derivation.