Three experiments were carried out to determine the effect of various forms of phonemic similarity and semantic relatedness on free recall. In particular the differential effects of these variables on long-term storage (LTS) and short-term storage (STS) were evaluated. The findings show that (a) both phonemic and semantic relatedness are responded to while words are in STS, (b) both factors increase the amount recalled from LTS, but (c) neither factor has any effect on the amount held in STS. The data give no support to the idea that STS is peculiarly phonemic or that LTS is peculiarly semantic or that similarity has an interference effect on either. Processing on the basis of both phonemic and semantic factors takes place in both STS and LTS.