This paper investigates the processing of Hebrew derivational morphology in an individual (S.E.) with deficient phonological short-term memory. In comparison to 10 age- and education-matched men, S.E. was impaired on digit span tasks and demonstrated no recency effect in word list recall. S.E. had low word retention span, but he exhibited phonological similarity and word length effects. His ability to make lexical decisions was intact. In a paired-associate test S.E. successfully learned semantically and morphologically related pairs but not phonologically related pairs, and his learning of nonwords was facilitated by the presence of Hebrew consonant roots. Semantic and morphological similarity enhanced immediate word recall. Results show that S.E. is capable of conducting morphological decomposition of Hebrew-derived words despite his phonological deficit, suggesting that transient maintenance of morphological constituents is independent of temporary storage and rehearsal of phonological codes, and that each is processed separately within short-term memory.