This study examined spoken-word recognition in children with specific language impairment (SLI) and normally developing children matched separately for age and receptive language ability. Accuracy and reaction times on an auditory lexical decision task were compared. Children with SLI were less accurate than both control groups. Two subgroups of children with SLI, distinguished by performance accuracy only, were identified. One group performed within normal limits, while a second group was significantly less accurate. Children with SLI were not slower than the age-matched controls or language-matched controls. Further, the time taken to detect an auditory signal, make a decision, or initiate a verbal response did not account for the differences between the groups. The findings are interpreted as evidence for language-appropriate processing skills acting upon imprecise or underspecified stored representations.