This study examined how word identification is influenced by interword spacing and morphological complexity in Thai, a script without interword spacing. While previous research supported the facilitative effect of interword spacing on Thai word identification, they did not account for the potential effects of the words’ morphological structure. The challenge of word identification becomes more pronounced when readers have to identify compound words (e.g., bathroom) when reading sentences without interword spacing. In an eye-tracking experiment that manipulated interword spacing (unspaced, spaced) and noun type (bimorphemic compound, monomorphemic) in Thai sentences, we confirmed previous findings that interword spacing has a facilitative effect on word identification, as evidenced by shorter first fixation duration, gaze duration and total fixation time. Furthermore, we observed an interaction effect indicating that interword spacing had a larger facilitative effect on the identification of compounds compared to monomorphemic words. Our results also revealed that the morphological structure of Thai words can influence saccadic movements, e.g., the first fixation landing position was closer to the beginning of compounds than to simple words. We suggest that the orthography-language interface, a language-specific feature, should be considered a major component in eye movement models of reading.