Compounding is productive and relatively unconstrained in German. Complex expressions with several constituent words can be created by concatenating all constituent words. To determine whether the concatenation of constituent words into a spatially unified compound expression hinders reading, complex compounds were shown with and without spaces between constituent words. We found shorter latencies in a naming task and shorter viewing durations in a reading task when interword spaces were inserted. Benefits derived from the availability of interword spaces occurred early in reading. Ending fixations on compound words, by contrast, showed inhibitory effects of interword spaces. Interword spaces thus assumed a dual function. They assisted the accessing of constituent word forms during the initial phase of compound reading but hampered the subsequent specification of a conceptually unified compound meaning.