The current experiments explored the parafoveal processing of transposed-letter (TL) neighbors by using an eye-movement-contingent boundary change paradigm. In Experiment 1 readers received a parafoveal preview of a target word (e.g., "calm") that was either (1) identical to the target word ("calm"), (2) a TL-neighbor ("clam"), or (3) a substituted-letter (SL) nonword ("chem"). In Experiment 2 a further set of parafoveal preview conditions was explored including (4) an SL-word condition ("chum") and (5) a TL-nonword condition ("caml"). Across both experiments, readers' fixation durations on the target words were significantly longer when the previews were SL previews than when they were TL neighbors, suggesting that TL neighbors (when presented in the parafovea) facilitate processing rather than inhibit processing. Experiments 3 and 4 showed that this is in contrast to the inhibitory effects that are seen when TL neighbor previews appear in the fovea. (Contains 7 tables, 1 figure and 5 footnotes.)