To date, it is still unclear how word structure might impact lexical processing in the brain for languages with an impoverished system of grammatical morphology such as Chinese. In this study, concurrent electroencephalogram (EEG) and functional near-infrared spectroscopy (fNIRS) recordings were performed to inspect the temporal and spatial brain activities that are related to Chinese word structure (compound vs. derivation vs. non-morphological) effects. A masked priming paradigm was utilized on three lexical conditions (compound constitute priming, derivation constitute priming, and non-morphological priming) to tap Chinese native speakers’ structural sensitivity to differing word structures. The compound vs. derivation structure effect was revealed by the behavioral data as well as the temporal and spatial brain activation patterns. In the masked priming task, Chinese derivations exhibited significantly enhanced brain activation in the frontal cortex and involved broader brain networks as compared with lexicalized compounds. The results were interpreted by the differing connection patterns between constitute morphemes within a given word structure from a spreading activation perspective. More importantly, we demonstrated that the Chinese word structure effect showed a distinct brain activation pattern from that of the dual-route mechanism in alphabetic languages. Therefore, this work paved a new avenue for comprehensively understanding the underlying cognitive neural mechanisms associated with Chinese derivations and coordinate compounds.