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This paper discusses lexicalized fingerspelling and initialization in Mexican Sign Language (LSM). It analyzes various phonological restructuring processes that take place when fingerspelled words become lexicalized and it argues that these lexicalized signs are part of the foreign/non-native lexicon of LSM, based on a model by Brentari and Padden (2001). As far as initialization, which is extremely common in LSM, is concerned, this article describes variation in the use of initialization by different signers of LSM, and the various lexical families based on initialization that exist in LSM. It also argues that, unlike lexicalized fingerspelling and unlike initialized signs in ASL, initialized signs are part of the core vocabulary of LSM, because they behave like native signs both phonologically and morphologically. To conclude, the morphological structure of initialized signs is discussed.