This paper deals with the phonological reconstruction of Old English Palatalization in prefixed words focusing on how morphology interacts with phonology and how the phonological reconstruction can be substantially confirmed. It will be shown that the traditional descriptions of Old English Palatalization tend to oversimplify the contexts for its application and make predictions not consistent with other synchronic phonological phenomena. Once the sound values of the relevant consonants in Old English prefixed words are reconstructed, Middle English orthographic system and the alliterative convention in Old English versification, often used as major sources for the reconstruction of Old English sounds, will be explored in detail in order to evaluate the validity of the proposed phonological reconstruction.