This article reviews some basic issues on spoken-word recognition, focussing on the mechanism of speech segmentation and a role of prosody. First, the mechanism of speech segmentation is discussed with reference to the rhythmic hypothesis. Second, the role of prosody in spoken-word recognition is discussed with the illustration of the phoneme activation model. It is argued that unlike the prosody in English and Chinese, the prosody in Japanese is involved with the selection of words in mental lexicon.