We explored how character order information is encoded in isolated word processing or Chinese sentence reading in 2 experiments using a masked priming paradigm and a gaze-contingent display-change paradigm. The results showed that response latencies in the lexical decision task and reading times on the target word region were longer in the unrelated condition (the prime or the preview was unrelated with the target word) than the transposed-character condition (the prime or the preview was a transposition of the 2 characters of the target word), which were respectively longer than in the identity condition (the prime or preview was identical to the target word). These results show that character order is encoded at an early stage of processing in Chinese reading, but character position encoding was not strict. We also found that character order encoding was similar for single-morpheme and multiple-morpheme words, suggesting that morphemic status does not affect character order encoding. The current results represent an early contribution to our understanding of character order encoding during Chinese reading.