Matses, a Panoan language spoken in Amazonian Peru and Brazil, has a set of 28 monosyllabic forms, representing mostly body parts, which are phonologically attached to the front of verbs, adjectives, and nouns. All Panoan languages seem to have a similar set of morphemes, and there is some controversy about whether these are prefixes or incorporated nouns. Here, this phenomenon is exemplified in detail for Matses, and I argue that while this process might have evolved from noun incorporation, synchronically it should be considered prefixation. This distinction is important for the synchronic interpretation of Matses prefixation as product of grammaticalization and for a comparative-historical perspective of these Panoan forms. Among the characteristics of Matses prefixation that are not consistent with noun incorporation is an applicative-like function, where the prefix allows into the clause an extra constituent that is in a Figure-Ground relation with absolutive arguments. © 2006 by The University of Chicago. All rights reserved.