Barley (Hordeum vulgare L.) and wheat (Triticum monococcum L. and Triticum turgidum L.) were among the principal `founder crops' of southwest Asian agriculture. Two issues that were central to the cultural transition from foraging to food production are poorly understood. They are the dates at which human groups began to routinely exploit wild varieties of wheat and barley, and when foragers first utilized technologies to pound and grind the hard, fibrous seeds of these and other plants to turn them into easily digestible foodstuffs. Here we report the earliest direct evidence for human processing of grass seeds, including barley and possibly wheat, in the form of starch grains recovered from a ground stone artefact from the Upper Palaeolithic site of Ohalo II in Israel. Associated evidence for an oven-like hearth was also found at this site, suggesting that dough made from grain flour was baked. Our data indicate that routine processing of a selected group of wild cereals, combined with effective methods of cooking ground seeds, were practiced at least 12,000 years before their domestication in southwest Asia.