In reading, information from parafoveal words is extracted before direct fixation; however, it is debated whether this processing is restricted to orthographic features or also encompasses semantics. Moreover, the neuronal mechanisms supporting parafoveal processing remain poorly understood. We co-registered MEG and eye-tracking data in a natural reading paradigm to uncover the timing and brain regions involved in parafoveal processing. Representational similarity analysis revealed that parafoveal orthographic neighbours (e.g., "writer" vs. "waiter") showed higher representational similarity than non-neighbours (e.g., "writer" vs. "police"), emerging ~68 ms after fixation onset on the preceding word (e.g., "clever") in the visual word form area. Similarly, parafoveal semantic neighbours (e.g., "writer" vs. "author") exhibited increased representational similarity at ~137 ms in the left inferior frontal gyrus. Importantly, the degree of orthographic and semantic parafoveal processing was correlated with individual reading speed. Our findings suggest fast hierarchical processing of parafoveal words across distinct brain regions, enhancing reading efficiency.