This study examined how L2 learners of English process morphologically complex words (e.g., bareness) and psuedowords (e.g.,*boilness) to investigate if the L2 processing of derivational morphology is subject to critical period effects. It has been claimed that native speakers rely on procedural memory to process morphologically complex words, while L2 learners tend to utilize declarative memory to process them (Ullman, 2001, 2004, 2005). According to Ullman, L2 learners’ reliance on declarative memory for processing morphologically complex words is due to maturational changes in procedural memory. Two related experiments with a masked priming lexical decision task were conducted with two groups of Korean learners: early and late L2 learners. With regard to the results, early L2 learners showed stem priming effects for morphologically related prime-target pairs, which is indicative of morphological decomposition. On the other hand, late L2 learners did not provide any evidence of stem priming, indicating that they might have processed the morphologically complex word/pseudoword as a whole unit. These data suggest that the L2 processing of late learners is different from that of early learners.