This thesis aims to reveal the mechanisms and constraints involving in long-distance dependency formation in the static knowledge of language and in real-time sentence processing. Special attention is paid to the grammar and processing of island constraints. Several experiments show that in a head-final language like Japanese global constraints like island constraints are applied long before decisive information such as verb heads and relative heads, are encountered. Based on this observation, the thesis argues that there is a powerful predictive mechanism at work behind real time sentence processing. A model of this predictive mechanism is proposed. This thesis examines the nature of several island constraints, specifically Complex NP Islands induced by relative clauses, and clausal adjunct islands. It is argued that in the majority of languages, both relative clauses and adjunct clauses are islands, but there is a small subset of languages (including Japanese, Korean and Malayalam) where extraction out of adjunct clauses seems to be allowed. Applying well-established syntactic tests to the necessary constructions in Japanese, it is established that dependencies crossing adjunct clauses are indeed created by movement operations, and still the extraction is allowed from adjuncts. Building on previous findings, the thesis turns to the investigation of the interaction between real time sentence processing and island constraints. Looking specifically at Japanese, a head-final language this thesis ask how the structure of sentences are built and what constraints are applied to the structure building process. A series of experiments shows that in Japanese, even before high-information bearing units such as verbs, relative heads or adjunct markers are encountered, the structural skeleton is built, and such pre-computed structures are highly articulated. It is shown that structural constraints on long-distance dependencies are imposed on the pre-built structure. It is further shown that this finding support the incrementality of sentence processing.