This study examined phonological, lexical, and grammatical skills in the spontaneous speech of children between 18-to 30-months of age and the relationship of these skills to speech-language processing. Methods: Twelve children age 18-24 months and twelve children age 25-30 months participated in the study. Fifty utterances from each child were collected during spontaneous speech and analyzed using measures in three categories: phonological (PMLU, PWP, PWC, PCC, FMLU), lexical (NDW, NTW), and grammatical (NDGM, NTGM, TTRgm, MLUw, MLUm). Multivariate analysis of variance was used to examine age group differences, and the correlation between phonological, lexical, and grammatical skills. Results: Analysis of PMLU, FMLU, NDW, NTW, NDGM, NTGM, MLUw, and MLUm revealed that the 25-to 30-month-old children's results were significantly higher. A significant positive correlation was apparent between several of the phonological and lexical measures in the 18-to 24-month-old group; however, several of the phonological and grammatical measures revealed significant positive and negative correlations. Conclusion: These findings suggest that before 2 years of age, there appear to be tradeoffs between phonological and grammatical skills; however, when a child reaches 2 years of age, language development has progressed so that phonological and grammatical skills are interdependent.