This study examined whether compensation for coarticulation in fricative–vowel syllables is phonologically mediated or a consequence of auditory processes. Smits (2001a) had shown that compensation occurs for anticipatory lip rounding in a fricative caused by a following rounded vowel in Dutch. In a first experiment, the possibility that compensation is due to general auditory processing was investigated using nonspeech sounds. These did not cause context effects akin to compensation for coarticulation, although nonspeech sounds influenced speech sound identification in an integrative fashion. In a second experiment, a possible phonological basis for compensation for coarticulation was assessed by using audiovisual speech. Visual displays, which induced the perception of a rounded vowel, also influenced compensation for anticipatory lip rounding in the fricative. These results indicate that compensation for anticipatory lip rounding in fricative–vowel syllables is phonologically mediated. This result is discussed in the light of other compensation-for-coarticulation findings and general theories of speech perception.