The output hypothesis claims that production makes the learner move from ‘semantic processing’ prevalent in comprehension to more ‘syntactic processing’ that is necessary for second language development. The purpose of this article is to illuminate the psycholinguistic mechanisms that underlie this claim by reviewing previous literature in language acquisition and cognitive psychology on the comprehension and production processes in language use and language learning. In speech comprehension, the interactive and compensatory nature of the human comprehension system can both promote comprehension and hinder language development for second language learners, unless the learners are somehow pushed to attend to form–meaning connections during input processing. In elucidating the mechanisms by which output promotes SLA, it is argued, by drawing on Levelt's (1989, 1992, 1993) speech production model, that the processes of grammatical encoding during production and monitoring to check the matching of the communicative intention and the output enable language learners to assess the possibilities and limitations of their interlanguage capability. This may, under certain conditions, serve as an internal priming device for consciousness raising for the learners, which in turn creates an optimal condition for language learning to take place. It is argued that understanding of the constraints and potentials for learning created by input and output processing is crucial for devising pedagogical tasks that effectively promote interlanguage development.