Language perception studies on bilinguals often show that words that share form and meaning across languages (cognates) are easier to process than words that share only meaning. This facilitatory phenomenon is known as the cognate effect. Most previous studies have shown this effect visually, whereas the auditory modality as well as the interplay between type of similarity and modality remain largely unexplored. In this study, highly proficient late Spanish–English bilinguals carried out a lexical decision task in their second language, both visually and auditorily. Words had high or low phonological and orthographic similarity, fully crossed. We also included orthographically identical words (perfect cognates). Our results suggest that similarity in the same modality (i.e., orthographic similarity in the visual modality and phonological similarity in the auditory modality) leads to improved signal detection, whereas similarity across modalities hinders it. We provide support for the idea that perfect cognates are a special category within cognates. Results suggest a need for a conceptual and practical separation between types of similarity in cognate studies. The theoretical implication is that the representations of items are active in both modalities of the non-target language during language processing, which needs to be incorporated to our current processing models.