Sentences written in Chinese are composed of continuous sequences of characters, without spaces or other visual cues to mark word boundaries. While skilled L1 readers can efficiently segment this naturally unspaced text into words, little is known about the word segmentation capabilities of L2 readers, including whether they employ the same strategies to process temporary segmental ambiguities. Accordingly, we report two eye movement experiments that investigated the processing of sentences containing temporarily ambiguous “incremental” three-character words (e.g., “体育馆,” meaning “stadium”) whose first two characters could also form a word (“体育,” meaning “sport”), comparing the performance of 48 skilled L1 Chinese readers and 48 high-proficiency L2 Chinese readers in each experiment. Our findings reveal that both groups can process this ambiguity efficiently, employing similar word segmentations strategies. We discuss our findings in relation to models of eye movement control and word recognition in Chinese reading.