Most familiar syntactic frameworks recognize the category ‘phrase’, and are built around phrase structure relationships. However, the Word Grammar dependency model does not acknowledge the category ‘phrase’ as a primitive in the grammar; instead, all relationships are word-based, with phrases having no syntactic status. Here, I investigate the theoretical validity of the notion ‘phrase’ by examining the phenomenon in Welsh known as syntactic soft mutation, contrasting a phrase-based account with a dependency account. I conclude that an empirically adequate analysis of syntactic soft mutation must make reference to phrases as a category, thus ruling out the dependency account. A further theoretical question concerns the role played in the grammar by syntactically present but phonetically unrealized elements, including empty categories such as wh-traces and unrealized material in ellipsis. Syntactic soft mutation proves an interesting testing ground in these contexts, but the data again fail to support the dependency account. The conclusion is that a phrase-based account of the mutation is better motivated and empirically more accurate than the alternative dependency account.