The present study investigated the neural bases of phonological onset competition using an eye tracking paradigm coupled with fMRI. Eighteen subjects were presented with an auditory target (e.g., beaker) and a visual display containing a pictorial representation of the target (e.g., beaker), an onset competitor (e.g., beetle), and two phonologically and semantically unrelated objects (e.g., shoe, hammer). Behavioral results replicated earlier research showing increased looks to the onset competitor compared to the unrelated items. fMRI results showed that lexical competition induced by shared phonological onsets recruits both frontal structures and posterior structures. Specifically, comparison between competitor and no-competitor trials elicited activation in two nonoverlapping clusters in the left IFG, one located primarily within BA 44 and the other primarily located within BA 45, and one cluster in the left supramarginal gyrus (SMG) extending into the posterior superior temporal gyrus. These results indicate that the left IFG is sensitive to competition driven by phonological similarity and not only to competition among semantic/conceptual factors. Moreover, they indicate that the SMG is not only recruited in tasks requiring access to lexical form but is also recruited in tasks that require access to the conceptual representation of a word.