Previous research has suggested that children with specific language impairments (SLI) have deficits in basic speech perception abilities, and this may be an underlying source of their linguistic deficits. These findings have come from studies in which perception of synthetic versions of meaningless syllables was typically examined in tasks with high memory demands. In this study, 20 children with SLI (mean age=9 years, 3 months) and 20 age-matched peers participated in a categorical perception task. Children identified and discriminated digitally edited versions of naturally spoken real words in tasks designed to minimize memory requirements. Both groups exhibited all hallmarks of categorical perception: a sharp labeling function, discontinuous discrimination performance, and discrimination predicted from identification. There were no group differences for identification data, but children with SLI showed lower peak discrimination values. Children with SLI still discriminated phonemically contrastive pairs at levels significantly better than chance, with discrimination of same-label pairs at chance. These data suggest that children with SLI perceive natural speech tokens comparably to age-matched controls when listening to words under conditions that minimize memory load. Further, poor performance on speech perception tasks may not be due to a speech perception deficit, but rather to a consequence of task demands. (Contains 2 figures, 1 footnote, and 1 table.)