The purpose of this study was to identify possible age-related changes in vowel perception and to assess lexical in#uences on both children's and adults' perception. More speci"cally, we sought to evaluate two proposals regarding the development of speech categories * namely, the category expansion and category de"nition hypotheses (e.g., Flege, 1992). In Experiment 1, 5-yr-old, 9-yr-old and adult monolingual, native speakers of English identi"ed vowels from two synthetic continua in the nonword context /h } b/. Vowels on the &&native'' continuum ranged from English /I/ to /i/; those on the &&foreign'' continuum ranged from English /I/ to an unfamilar, foreign vowel /Y/. Young children's phoneme boundary extended further away from the /I/ endpoint on the foreign continuum than did older children's and adults' * a result opposite to that predicted by the category expansion hypothesis. However, in support of the category de"nition hypothesis, an age-related increase in the slopes of subjects' identi"cation functions was observed, especially for the native continuum. In Experiment 2, the same vowel stimuli were presented in the contexts /b } b/ and /b } p/ to 5-yr-olds, 9-yr-olds and adults; thus, one endpoint for the native /I}i/ continua always formed a word (viz, &&bib'' or &&beep''), whereas, for the foreign /I}Y/ continua, the only word endpoint was &&bib''. It was again found that young children's phoneme boundary extended further away from the /I/ endpoint, when this vowel was not bounded by another native vowel. In addition, the slopes of their identi"cation functions were steeper, and thus more like those of older listeners, especially when the endpoint stimuli were real words. The results suggest that despite similarities in the extent of native vowel categories for young and older listeners, young children's categories are still quite #exible. Moreover, developmental di!erences in how sharply de"ned category boundaries are may depend, in part, on variations in lexical knowledge. 1999 Academic Press 308 =alley et al. there is little direct evidence from children on this issue. There is also little evidence relating infants' perceptual abilities to spoken language processing in childhood (see Walley, 1993b). Especially little is known about vowel perception in childhood, perhaps because children seem to learn to produce many of the vowels of their native language more readily than they do its consonants (cf.