The present study asked whether or not the apparent insensitivity of second language (L2) learners to grammatical gender violations reflects an inability to use grammatical information during L2 lexical processing. Native German speakers and English speakers with intermediate to advanced L2 proficiency in German performed a translation-recognition task. On critical trials, an incorrect translation was presented that either matched or mismatched the grammatical gender of the correct translation. Results show interference for native German speakers in conditions in which the incorrect translation matched the gender of the correct translation. Native English speakers, regardless of German proficiency, were insensitive to the gender mismatch. In contrast, these same participants were correctly able to assign gender to critical items. These findings suggest a dissociation between explicit knowledge and the ability to use that information under speeded processing conditions and demonstrate the difficulty of L2 gender processing at the lexical level.