The purpose of the present study is to explore how Japanese EFL learners store and process formulaic sequences (FSs) in their mental lexicon. An oral reading task was conducted based on the holistic hypothesis that FSs are stored and retrieved as single lexicalized units. The hypothesized processing advantage of FSs was investigated by comparing reading latency and the rates of speech and errors for three types of sequences: formulaic, nonformulaic, and ungrammatical sequences. Our speech data revealed that FSs were processed significantly faster as for reading latency, thereby indicating that non-advanced EFL learners benefit from the processing advantage of FSs. As for speech rate, the participants read FSs significantly faster than the other sequences. This suggests that they have formed cohesive phonological representation of FSs in mind. These results confirmed psycholinguistic reality of FSs in L2 mental lexicon. It should be noted that sequence familiarity is one of the factors that would affect the processing of FSs as well as frequency.