A method and apparatus are provided for segmenting words into component parts. Under the invention, mutual information scores for pairs of graphoneme units found in a set of words are determined. Each graphoneme unit includes at least one letter. The graphoneme units of one pair of graphoneme units are combined based on the mutual information score. This forms a new graphoneme unit. Under one aspect of the invention, a syllable n-gram model is trained based on words that have been segmented into syllables using mutual information. The syllable n-gram model is used to segment a phonetic representation of a new word into syllables. Similarly, an inventory of morphemes is formed using mutual information and a morpheme n-gram is trained that can be used to segment a new word into a sequence of morphemes.