This chapter reviews recent developments that reflect a convergence of work in various branches of linguistics and psycholinguistics around the implications of the incremental sequencing of speech units for understanding grammar and the cognitive processing that underlies the production, comprehension, and interpretation of utterances. Notions from Functional Discourse Grammar are used to present a view of syntactic structure as arising from the incremental extension of holophrases, i.e. minimal utterances. By prioritizing the timecourse of language processing, the chapter interprets syntactic hierarchy as arising from chunk-and-pass operations supported by predictive processing. Spoken dialogue is identified as the primary arena for these processes, with grammaticality subordinated to situational appropriateness. Linguistic data are seen as protocols of joint action aimed at the incremental co-creation of meaning. All of these notions make essential reference to context as constantly active, prior to and during the utterance of the linguistic signal, and as a crucial component of the operations and processes that take place in verbal interaction.