|Chinese and English differ in the types of information they use to convey meaning in words: unlike English, Chinese uses lexical tones (i.e., pitch movement) to contrast word meanings (e.g., in Chinese, the word “ma” can mean mother, hemp, horse, or scold depending on its lexical tone). This difference between Chinese and English poses word recognition difficulties for English-speaking learners of Chinese in using lexical tones to recognize Chinese words. Existing research on L2 learners’ perception and processing of lexical tones has focused on whether native listeners of languages that do not have lexical tones can discriminate and identify lexical tones. To date, no study to our knowledge has examined how L2 learners use the fine-grained phonetic details of tonal information in the time course of spoken word recognition — that is, as the speech signal unfolds over time. In fact, little research has looked into the time course with which native listeners use the fine-grained phonetic details of tonal information in spoken word recognition. This doctoral dissertation examines how native Chinese listeners and highly proficient adult English-speaking learners of Chinese use tonal information in spoken word recognition as the speech signal unfolds in time. More specifically, this research uses the visual-world eye-tracking paradigm to shed light on the precise time course with which native and non-native listeners use tonal information in online word recognition. The proposed research aims to investigate two potential differences between native listeners and highly proficient English-speaking L2 learners of Chinese in their use of tonal information as the speech signal unfolds: (i) their potentially different incremental use of the early pitch height before pitch contour information of the tone is available; (ii) their potentially different sensitivities to fine-grained within-category gradience of level and contour tones in the word recognition process. Experiment 1 investigates whether or not native and non-native listeners make similar use of early between-category pitch height (T1-T4 with similar early pitch height vs. T1-T2 with different pitch height) before pitch contour information is available. A visual-world eye-tracking experiment in Chinese was conducted with two groups of participants: 36 native Chinese listeners and 26 highly proficient English-speaking L2 learners of Chinese. The target was either T1 or T2 word in T1-T2 condition whereas the target was either T1 or T4 word in T1-T4 condition. The auditory stimuli were natural tonal tokens. The time-window analyses on fixations showed that early pitch height constrained both Chinese and English listeners’ lexical access. While Chinese listeners started using early pitch height in the time window in which pitch contour information was not available, English listeners started using early pitch height in the time windows in which pitch contour information had been available, and showed more tonal competition than Chinese listeners. The findings suggest that whether or not prosodic cues contribute to distinguishing among words in the L1, and how they do so, influence listeners’ use of these cues in spoken word recognition. Experiment 2 investigates whether native Chinese listeners and English-speaking L2 learners of Chinese differ in using the within-category gradience of level and contour tones to recognize spoken words. Another visual-world eye-tracking experiment in Chinese was conducted with the same participants. The target was a level tone (i.e., T1) and the competitor was a high-rising tone (i.e., T2), or vice versa. The auditory stimuli were manipulated such that the target tone was either canonical in the standard condition, acoustically more distant from the competitor in the distant condition, or acoustically closer to the competitor in the close condition. Growth curve analysis on fixations suggested that Chinese listeners showed a gradient pattern of lexical competition, with decreased competition in the distant condition and increased competition in the close condition than in the standard condition for the contour tone; English listeners, on the other hand, showed increased competition in both the distant and close conditions relative to the standard condition for the level tone. These findings suggest that Chinese listeners may show sensitivity to fine-grained tonal variability when this variability is along a dimension (i.e., pitch contour) that is meaningful for distinguishing tones whereas English listeners might show sensitivity to the fine-grained tonal variability along a dimension (i.e., pitch height) encoded in their L1 lexical representations. Moreover, native and non-native listeners, who potentially differ in the robustness of their representations of lexical tones, may adopt different strategies to deal with fined-grained tonal information to resolve the lexical competition. The findings of this doctoral dissertation make a contribution to the understanding of how tonal information modulates lexical activation in native and non-native Chinese listeners. This research also has pedagogical implications for Chinese language teaching.