Cross-linguistic transfer can be explained by structural ambiguity in a bilingual child's two languages (Döpke, 1998; Hulk and Müller, 2000). This study examined the effect of morphological ambiguity in transfer of deverbal compounds in English and French. English-speaking children go through a stage of producing ungrammatical verb-object compounds in their acquisition of object-verb-er compounds. In French, verb-object compounds are productive. If structural ambiguity predicts when transfer occurs, French-English bilingual children should use more ungrammatical verb-object compounds than English-speaking children and more grammatical verb-object compounds than French-speaking children. This study focused on 36 French-English bilingual children's production and comprehension of novel deverbal compounds in both languages. The results supported these predictions for production but not for comprehension. It is concluded that cross-linguistic transfer is a language production phenomenon and that structural ambiguity can predict when morphological transfer can occur.