Researchers of cognitive processing in illiteracy have proposed that the acquisition of literacy modifies the functional organization of the brain. They have suggested that, while illiterate individuals have access only to innate semantic processing skills, those who have learned the correspondence between graphemes and phonemes have several mechanisms available to them through which to process oral language. We conducted 2 experiments to verify that suggestion with respect to language processing, and to elucidate further the differences between literate and illiterate individuals in the cognitive strategies used to process oral language, as well as hemispheric specialization for these processes. Our findings suggest that semantic processing strategies are qualitatively the same in literates and illiterates, despite the fact that overall performance is augmented by increased education. In contrast, explicit processing of oral information based on phonological characteristics appears to be qualitatively different between literates and illiterates: effective strategies in the processing of phonological information depend upon having had a formal education, regardless of the level of education. We also confirmed the differential abilities needed for the processing of semantic and phonological information and related them to hemisphere-specific processing.