Research on the phonetic consistency effect in Chinese began in the 1980s. For nearly forty years, the consistency effect, as well as its implications for Chinese character recognition, has been frequently examined. This article presents the debate over the consistency effect in Chinese character recognition. While some research supported the involvement of prelexical phonology and sublexical processing based on the presence of consistency effects, others argued against these accounts by revealing three potential limitations, including the confounding of the task demand effect, the regularity effects and the frequency effect. A possible way to settle the debate is to shift focus to the top-down role of neighborhood characteristics underlying the consistency effect in Chinese character recognition.