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 the orthographic and semantic properties of words? Imaging studies in English failed to show unequivocal morphological activation that is distinct from semantic or orthographic activation. Cognitive research in Hebrew has revealed that morphological decomposition is an important component of print processing. In Hebrew, morphological relatedness does not necessarily induce a clear semantic relatedness, thus, Hebrew provides a unique opportunity to investigate the neural substrates of morphological processing. In this functional magnetic resonance imaging study, participants were required to perform judgment tasks of morphological relatedness, semantic relatedness, rhyming, and orthographic similarity. Half of the morphologically related words were semantically related and half were semantically unrelated. This design was chosen to induce explicit morphological processing. We identified two locations involved in morphological processing: the left middle frontal gyrus and the left inferior parietal sulcus. Comparing locations of morphological related activation to the locations of semantic and orthographic related activation, we found that the areas neighbored but only partially overlapped. The similarity in activation between the two morphological conditions eliminates the possibility that morphological activation simply results from the semantic properties of the words. These results demonstrate the important role of morphological processing in reading and suggest that morphological analysis is a distinct process of visual word recognition.