An interesting area of psycholinguistic inquiry is to discover the way morphological structures are stored in the human mind and how they are retrieved during comprehension or production of language. The current study probed into what goes on in the mind of EFL learners when processing derivational morphology and how English and Persian derivational suffixes are processed. 60 Iranian EFL learners at intermediate and advanced levels of proficiency whose proficiency level were determined through Oxford Quick Placement Test, participated in masked priming experiments using E-prime software. Two separate priming tasks in Persian and English were conducted during the course of this study. The target words were primed in three ways: identity (careful""careful), related (care""careful) and control primes (desire""careful). Participants’ reaction times were measured by E-prime software and were fed into SPSS software for further analysis. The results indicated that Proficiency plays a role in the way derivational morphology is processed, because at lower proficiency levels more decomposition was detected while more proficient participants utilized more whole-word representation. Furthermore, Persian learners of English processing of the derived words could not be assigned strictly to decomposition or whole-word representations in the mind. What seems more plausible to assume is that highly frequent words (whether base or suffix frequency) as well as derived words with more productive suffixes are stored as whole words but lower base and morpheme frequency ones and those with suffixes having less productivity are decomposed. These findings lend further support to dual route model.