Infants' auditory processing abilities have been shown to predict subsequent language development. In addition, poor auditory processing skills have been shown for some individuals with specific language impairment. Methods used in infant studies are not appropriate for use with young children, and neither are methods typically used to test auditory processing skills in specific language language impairment (SLI). The objective in this study was to develop an appropriate way of testing auditory processing skills in children in the 4-5 year age range. We report data from 49 children aged 4-5 years (mean age 58.57 months) tested on five tasks with tones and synthesized syllables. Frequencies and inter-stimulus intervals were varied in the tone tasks; the second formant transitions between consonant and vowel were varied in the syllable tasks. Consistent with past research, variability was found in children's auditory processing abilities. Significant correlations in discrimination thresholds for the tasks were found. The results from two regression analyses showed that the children's auditory processing abilities predicted significant amounts of variance for receptive and expressive language.