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Based on compositionality, this paper proposes a three-grade hierarchy to classify 108 Chinese idioms (comparatively familiar and literally plausible) into three groups. With 36 non-idiomatic literal phrases as the control group, the present study used the event-related (brain) potentials (ERPs) to investigate the time course of Chinese idiom comprehension and the effects of compositionality on this process. Primed by their literal interpretations, Chinese idioms with varying degrees of compositionality and non-idiomatic phrases were visually presented to subjects for performing a semantic judgment task. The results showed a graded modulation of two ERP components (i.e. the N250 and the N400): for the Chinese idioms, stimuli with high compositionality elicited the smallest ERP effects, while stimuli with low compositionality the largest; compared with idioms, literal non-idioms induced larger amplitudes with regard to both the components. The N250 has been reported for the first time in ERP studies of the Chinese language. In view of unique features of Chinese characters, the functional significance of the two components provides converging evidence for distinct effects of compositionality on activating figurative meanings in processing Chinese idioms, and that language users attempted to do some compositional analysis in this process. Moreover, putative cognitive processes reflected by the two components contribute to an interim model specified for processing Chinese idioms: prelexical form recognition coinciding with early meaning retrieval, followed by postlexical semantic integration with contextual constraints.

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