Much research has documented learners’ ability to segment auditory and visual input into its component units. Two types of models have been designed to account for this phenomena: statistical models, in which learners represent statistical relations between elements, and chunking models, in which learners represent statistically coherent units of information. In a series of three experiments, we investigated how adults’ performance on a visual sequence-learning task aligned with the predictions of these two types of models. Experiments 1 and 2 examined learning of embedded items and Experiment 3 examined learning of illusory items. The pattern of results obtained was most consistent with the competitive chunking model of Servan-Schreiber and Anderson (1990). Implications for theories and models of statistical learning are discussed.