This study examined how Chinese native speakers (NSs) and second language (L2) learners process compound words. The findings showed that they used the hybrid model of coexistence for whole word and morphemes; and were influenced by word frequency, semantic transparency, and word structure. The results revealed that two groups of participants used hybrid representation when identifying high-frequency words and whole-word representation when identifying low-frequency words. Besides, semantic transparency might impact word structure awareness, and subject-predicate words were the most difficult to process. The research also showed that L2 learners' word frequency effect was more robust than NSs'; morpheme location information might affect NSs, but L2 learners could not process it. There was variation in NSs' speed in recognizing transparent and obscure words, but there was no difference among L2 learners. Besides, L2 learners' word recognition speed could not reach the levels of NSs. Since the mental lexicon was put forward, researchers have begun to study the processing and representation of words. As an important part of vocabulary, the processing mechanism of compound words has also received much attention. There have been many studies on how native speakers process compound words so far, but researches on L2 learners are still in its infancy, and most of these studies have been done on English L2 learners, with little research on other languages, for example, Chinese as a second language. Compound words account for about 65% of the vocabulary in Mandarin Chinese. Therefore, research on the processing of Chinese compound words is of great significance. Two lexical judgment experiments were designed for the present study respectively with word frequency, semantic transparency, and lexical structure as independent variables to solve the disputes in the processing of compound words among native Chinese speakers and L2 learners adopting the repetitive priming paradigm based on the reaction time task. This work is the first to explore the interaction effects of semantic transparency and lexical structure on compound word processing. This study may be of particular interest to the general readers of your journal as it gives insight into the compound word processing mechanism of non-English second languages and enriches the theoretical knowledge of L2 word processing from a cross-language perspective. The findings show that they employ the hybrid model of coexistence for whole words and morphemes, and are affected by word frequency, semantic transparency, and word structure. We found that both Chinese native speakers (NS) and L2 learners use hybrid representation when identifying high-frequency words and whole-word representation when identifying low-frequency words; word structure awareness is affected by semantic transparency, and subject-predicate words are the most difficult to process. However, we also found that L2 learners' word frequency effect is stronger than NSs'; morpheme location information may have an effect on NSs, but L2 learners cannot process it; There is variation in NSs' speed in recognizing transparent and obscure words, but there is no difference among L2 learners. In addition, L2 learners' word recognition speed and aptitude cannot reach the levels of NSs. Thus, Chinese L2 learners differ from English L2 learners in their lexical representations, as well as in the effects of semantic transparency, which further enriches the theory of L2 lexical processing.