Α psycholinguistic framework for speech processing was adopted to investigate the development of phonological and morphological skills in children learning Greek. It was investigated whether morphological items pose specific challenges in terms of speech processing. Two groups of typically developing children aged 3.0-3.5 years (N = 16) and 4.6-5.0 years (N = 22), respectively, were assessed longitudinally at three assessment points 6 months apart. A range of phonologically based and morphologically based experimental speech processing tasks was administered to address the research question, along with language comprehension and production assessments to ensure that the children were developmentally typical. Stimuli of minimal phonological difference and minimal morphological difference, respectively, were used. Phonologically based experimental stimuli were used to assess performance differences across properties such as voicing, manner and place of articulation, in addition to variation in phonotactic structure. Morphologically based experimental stimuli were used to assess the impact of characteristics such as verb tense and possessive pronouns. Stimuli were incorporated into tasks of real word and nonword auditory discrimination and repetition, to assess input and output processing. Items were matched across tasks so that comparisons could be made. On most of the matched tasks, there was no significant difference in performance accuracy between morphological and phonological conditions. Moreover, a significant relationship was found between domains. It is suggested that morphological items, compared to phonological items, do not pose specific challenges in terms of speech processing. The clinical implications of these findings for assessment and intervention are discussed.