Ninety kindergarten, first-grade, and second-grade students participated in this study of ability to segment oral language into words and word units. Each child completed two individually administered oral segmentation tests and the Metropolitan Achievement Test. Results indicated that the ability to segment orally presented sentences developed earlier than the ability to segment the smallest sounds in words; the ability to segment complex sentences and words developed later than the ability to segment simpler, smaller units; and the ability to segment oral language developed at the same rate in boys and in girls. The ability to segment sentences had a significant and positive relationship to second-grade reading achievement, but the ability to segment words had no direct relationship to reading achievement at either first-grade or second-grade levels. (AA)