Lexical decisions for low- and high-frequency words are equally facilitated by masked repetition priming, whereas nonwords typically show no effect of such priming. This pattern of results has been used to argue against an episodic account of masked priming and in favor of a lexical account in which the prime opens the lexical entry of the upcoming target. We propose that an episodic account can be compatible with additive effects of masked priming and word frequency. We also demonstrate that masked priming of nonwords can be reliably produced, indicating that primes operate at a nonlexical level, primarily to facilitate orthographic encoding. The processing fluency created by a masked prime can work against correct classification of nonwords in a lexical decision task, leading either to no effect of priming or to an interference effect when subjects depend heavily on familiarity as a basis for lexical decisions.