Little is yet known about how L2 learners process morphology during visual word recognition. Two points of view may be contrasted: the first one suggests that L2 learners, as less proficient speakers, may be less sensitive to the computational aspects of word processing such as the morphological structure of complex words, relying more on lexical information; whereas, the second one suggests that word processing is constrained mainly by linguistic aspects, making L2 learners as sensitive to word structure as native speakers. While previous studies have mainly focused on proficient to highly proficient L2 speakers, the present study compared L2 learners of low proficiency with those of intermediate to high levels of proficiency. The role of morphological structure in word recognition and pseudoword processing was examined by manipulating the presence of embedded words and suffixes in items presented for L2 lexical decision. Contrasting patterns in L2 word recognition were observed between groups as the low-proficiency group was more sensitive to the presence of an embedded word than the higher proficiency group in both accuracy and speed. However, pseudowords made up of an embedded word and suffix were significantly more likely to be wrongly accepted as words than other pseudowords by both groups. Furthermore, correct rejection of these items as words induced longer latencies in both groups, indicating a morphological analysis of these pseudowords. Together, the results show that L2 learners, including those who are low in proficiency, are sensitive to the morphological structure of written L2 words.