Is morphology a discrete and independent element of lexical structure or does it simply reflect a fine-tuning of the system to the statistical correlation that exists among orthographic and semantic properties of words? Hebrew provides a unique opportunity to examine morphological processing in the brain because of its rich morphological system. In an fMRI masked priming experiment, we investigated the neural networks involved in implicit morphological processing in Hebrew. In the lMFG and lIFG, activation was found to be significantly reduced when the primes were morphologically related to the targets. This effect was not influenced by the semantic transparency of the morphological prime, and was not found in the semantic or orthographic condition. Additional morphologically related decrease in activation was found in the lIPL, where activation was significantly modulated by semantic transparency. Our findings regarding implicit morphological processing suggest that morphology is an automatic and distinct aspect of visually processing words. These results also coincide with the behavioral data previously obtained demonstrating the central role of morphological processing in reading Hebrew.