Several studies have begun to investigate the claim that children can make most phonological discriminations when they begin to speak. This paper investigates how well children aged 2;3 to 2;11 can discriminate between pairs of minimally different real words, and it shows that the results are affected by how well the children know the words. It is argued that in some earlier studies not knowing the words well enough may have given the impression of worse discrimination abilities. The present study makes several methodological improvements on the earlier studies. Pilot work had suggested that how well children know the words interfered with the results, so this variable was made a central part of the study. Also, on the assumption that children around two-and-a-half years of age can make many of the discriminations, those discriminations least likely to be known were investigated. (Author/NCR)