Although word boundaries are rarely clearly marked, listeners can rapidly recognize the individual words of spoken sentences. Some theories explain this in terms of competition between multiply activated lexical hypotheses; others invoke sensitivity to prosodic structure. We describe a connectionist model, SHORTLIST, in which recognition by activation and competition is successful with a realistically sized lexicon. Three experiments are then reported in which listeners detected real words embedded in nonsense strings, some of which were themselves the onsets of longer words. Effects both of competition between words and of prosodic structure were observed, suggesting that activation and competition alone are not sufficient to explain word recognition in continuous speech. However, the results can be accounted for by a version of SHORTLIST that is sensitive to prosodic structure.