Prosodic structure has long been known to constrain phonological processes [1]. More recently, it has also been recognized as a source of fine-grained phonetic variation of speech sounds. In particular, segments in domain-initial position undergo prosodic strengthening [2, 3], which also implies more resistance to coarticulation in higher prosodic domains [5]. The present study investigates the combined effects of prosodic strengthening and assimilatory devoicing on word-initial fricatives in German, the functional implication of both processes for cues to the fortis-lenis contrast, and the influence of prosodic structure on listeners’ compensation for assimilation. Results indicate that 1. Prosodic structure modulates duration and the degree of assimilatory devoicing, 2. Phonological contrasts are maintained by speakers, but differ in phonetic detail across prosodic domains, and 3. Compensation for assimilation in perception is moderated by prosodic structure and lexical constraints.