Partial speech input is often understood to trigger rapid and automatic activation of successively higher-level representations of words, from sound to meaning. Here we show evidence from magnetoencephalography that this type of incremental processing is limited when words are heard in isolation as compared to continuous speech. This suggests a less unified and automatic word recognition process than is often assumed. We present evidence from isolated words that neural effects of phoneme probability, quantified by phoneme surprisal, are significantly stronger than (statistically null) effects of phoneme-by-phoneme lexical uncertainty, quantified by cohort entropy. In contrast, we find robust effects of both cohort entropy and phoneme surprisal during perception of connected speech, with a significant interaction between the contexts. This dissociation rules out models of word recognition in which phoneme surprisal and cohort entropy are common indicators of a uniform process, even though these closely related information-theoretic measures both arise from the probability distribution of wordforms consistent with the input. We propose that phoneme surprisal effects reflect automatic access of a lower level of representation of the auditory input (e.g., wordforms) while the occurrence of cohort entropy effects is task-sensitive, driven by a competition process or a higher-level representation that is engaged late (or not at all) during the processing of single words.