Despite their importance in language, there have been relatively few computational studies in understanding words. This paper describes how neural networks can learn to perceive and produce words. Most traditional linguistic theories presuppose abstract underlying representations (UR) and a set of explicit rules to obtain the surface realization. There are, however, a number of questions that can be raised regarding this approach: (1) assumption of URs, (2) formation of rules, and (3) interaction of rules. In this paper, it is hypothesized that rules would emerge as the generalizations the network abstracts in the process of learning to associate forms with meanings of the words. Employing a simple recurrent network, a series of simulations on different types of morphophonemic processes was run. The results of the simulations show that this network is capable of learning to perceive whether words are in basic from or in inflected form, given only forms, and to produce words in the right form, given arbitrary meanings, this eliminating the need for presupposing abstract URs and rules.