Studies of syntactic ambiguity resolution have played a central role in resolving questions about when and how contextual information affects parsing processes. These investigations are often couched in terms of modularity versus interaction, with demonstrations of rapid contextual effects being taken as evidence that the mechanisms responsible for structuring sentences are permeable to referential or semantic context, and therefore non-modular. In this paper, we will propose that argument relations are constructed on the basis of lexically stored syntactic representations (as in MacDonald, M.C., Pearlmutter, N.J., and Seidenberg, M.S. (1994). Lexical nature of syntactic ambiguity resolution. Psychological Review, 101, 676-703. Pickering, M.J., and Traxler, M.J. (2004). Grammatical repetition and garden path effects. Paper presented to the CUNY Sentence Processing Conference. College Park, MD., Pickering, M.J., and Traxler, M.J. (2006). Syntactic Priming in Comprehension. Manuscript in preparation. Traxler, M.J., and Pickering, M.J. (2005, March). Syntactic priming in comprehension. Paper presented to the CUNY Sentence Processing Conference. Tucson, AZ), but that other types of structural decisions are made on the basis of general processing principles. This formulation can be tested by looking at how the parser reacts to immediate intra- and inter-sentential factors (short-term context) and how it reacts to patterns of input over longer time scales (long-term context). We begin with a brief review of work on context effects in syntactic disambiguation, sketch our account of parsing, and then provide evidence from two eye-tracking experiments that illustrate some of the processing principles that govern parsing of argument relations.