Research on infants’ online lexical processing by Fernald, Perfors, and Marchman (2006) revealed substantial individual differences that are related to vocabulary development, such that infants with better lexical processing efficiency show greater vocabulary growth across time. Although it is clear that individual differences in lexical processing efficiency exist and are meaningful, the theoretical nature of lexical processing efficiency and its relation to vocabulary size is less clear. In the current study, we asked two questions: (a) Is lexical processing efficiency better conceptualized as a central processing capacity or as an emergent capacity reflecting a collection of word-specific capacities? and (b) Is there evidence for a causal role for lexical processing efficiency in early vocabulary development? In the study, 120 infants were tested on a measure of lexical processing at 18, 21, and 24 months, and their vocabulary was measured via parent report. Structural equation modeling of the 18-month time point data revealed that both theoretical constructs represented in the first question above (a) fit the data. A set of regression analyses on the longitudinal data revealed little evidence for a causal effect of lexical processing on vocabulary but revealed a significant effect of vocabulary size on lexical processing efficiency early in development. Overall, the results suggest that lexical processing efficiency is a stable construct in infancy that may reflect the structure of the developing lexicon.