Much of the way words are recognized and processed in any language is related to and influenced by the writing system used in that language. A multitude of research has shown that first language orthography can have a significant impact on the way that words are recognized in a second language. However, is this transfer effect from the L1 orthography a static one that is insurmountable, or is it possible for cognitive processes to be restructured for the benefit of the L2 reader? The present study investigated this question through the use of two independent measures of word recognition processes. A lexical decision task incorporating an alternating-case text paradigm, and including word-based independent variables of word frequency and spelling regularity indicated that at higher proficiency levels, L1 Chinese learners of English have improved intra-word processing, especially among words with regular grapheme-phoneme correspondence. In addition, a semantic category judgment task using a homophone paradigm indicated that high proficiency readers have a greater reliance on phonology, and a lesser reliance on orthography, than do low proficiency readers.