Psycholinguistic theories assume an interaction between prosody and syntax during language processing. Based on studies using mostly off-line methods, it is unclear whether an interaction occurs at later or initial processing stages. Using event-related potentials, the present study provides neurophysiological evidence for a prosody and syntax interaction in initial processing. The sentence material contained mere prosodic and syntactic as well as combined prosodic-syntactic violations. For the syntax violation, the critical word appeared after a preposition. The suffix of the critical word either indicated a noun fulfilling the syntactic requirements of the preceding preposition or a verb causing a word category violation. For the prosodic manipulation, congruent critical words were normally intonated (signaling sentence continuation) while prosodically incongruent critical words signaled sentence end. For the mere prosodic incongruity, a broadly distributed negativity was observed at the critical word-stem (300–500 msec aligned to word onset). In response to a mere syntactic error, a left temporal negativity was elicited in an early time window (200–400 msec aligned to suffix onset), taken to reflect initial phrase structure building processes. In contrast, in response to the combined prosodic-syntactic violation, an early temporal negativity showed up bilaterally at the suffix in the same time window. Our interpretation is that the process of initial structure building as reflected in the early left anterior negativity recruits additional right hemispheric neural resources when the critical word contains both syntactic and prosodic violations. This suggests the immediate influence of phrasal prosody during the initial parsing stage in speech processing.