To characterize the functional role of the left-ventral occipito-temporal cortex (lvOT) during reading in a quantitatively explicit and testable manner, we propose the lexical categorization model (LCM). The LCM assumes that lvOT optimizes linguistic processing by allowing fast meaning access when words are familiar and filtering out orthographic strings without meaning. The LCM successfully simulates benchmark results from functional brain imaging described in the literature. In a second evaluation, we empirically demonstrate that quantitative LCM simulations predict lvOT activation better than alternative models across three functional magnetic resonance imaging studies. We found that word-likeness, assumed as input into a lexical categorization process, is represented posteriorly to lvOT, whereas a dichotomous word/non-word output of the LCM could be localized to the downstream frontal brain regions. Finally, training the process of lexical categorization resulted in more efficient reading. In sum, we propose that word recognition in the ventral visual stream involves word-likeness extraction followed by lexical categorization before one can access word meaning.