TWO groups of pre-school children, matched for age, sex, intelligence and home background, were given a battery of verbal tests 2nd their conversations were recorded during periods of free play. Data were obtained on vocabulary and sentence structure under controlled and spontaneous conditions, on the children's ability to understand and express themselves in simple sentences and on verbal expression in social intercourse. In all quantitative comparisons, the nursery school children were found to be in advance of the children in residential nurseries. Among qualitative differences noted, was the cxtent to which speech was used for establishing social contacts with contemporaries and for obtaining adult attention. Although there was considerable overlap in the achievements of the two groups, our evidence confirms that there is some retardation in the language skills of pre-school children in care.