Highly proficient German users of English as a second language, and native speakers of American English, listened to nonsense sequences and responded whenever they detected an embedded English word. The responses of both groups were equivalently facilitated by preceding context that both by English and by German phonotactic constraints forced a boundary at word onset (e.g., lecture was easier to detect in moinlecture than in gorklecture, and wish in yarlwish than in plookwish. The American L1 speakers’ responses were strongly facilitated, and the German listeners’ responses almost as strongly facilitated, by contexts that forced a boundary in English but not in German thrarshlecture, glarshwish. The German listeners’ responses were significantly facilitated also by contexts that forced a boundary in German but not in English )moycelecture, loitwish, while L1 listeners were sensitive to acoustic boundary cues in these materials but not to the phonotactic sequences. The pattern of results suggests that proficient L2 listeners can acquire the phonotactic probabilities of an L2 and use them to good effect in segmenting continuous speech, but at the same time they may not be able to prevent interference from L1 constraints in their L2 listening.