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By 24 mo of age, most typically developing infants with normal hearing successfully transition to the production of words that can be understood about 50% of the time. This study compares early phonological development in children with and without hearing loss to gain a clearer understanding of the effects of hearing loss in early-identified children. A secondary goal was to identify measures of early phonetic development that are predictors of later speech production outcomes.The vocalizations and early words of 21 infants with normal hearing and 12 early-identified infants with hearing loss were followed longitudinally over a period of 14 mo (from 10 to 24 mo of age). Thirty-minute mother-child interaction samples were video recorded at 6- to 8-wk intervals in a laboratory playroom setting. Vocalizations produced at 16 and 24 mo were categorized according to communicative intent and recognizable words versus other types. Groups were compared on the structural complexity of words produced at 24 mo of age. Parent report measures of vocabulary development were collected from 10 to 30 mo of age, and Goldman-Fristoe Test of Articulation scores at 36 mo were used in regression analyses.Both groups increased the purposeful use of voice between 16 and 24 mo of age. However, at 24 mo of age, the toddlers with hearing loss produced significantly fewer words that could be recognized by their mothers. Their samples were dominated by unintelligible communicative attempts at this age. In contrast, the samples from normal hearing children were dominated by words and phrases. At 24 mo of age, toddlers with normal hearing were more advanced than those with hearing loss on seven measures of the structural complexity of words. The children with normal hearing attempted more complex words and productions were more accurate than those of children with hearing loss. At 10 to 16 mo of age, the groups did not differ significantly on parent-report measures of receptive vocabulary. However, the hearing loss group was much slower to develop expressive vocabulary and demonstrated larger individual differences than the normal hearing group. Six children identified as atypical differed from all other children in vowel accuracy and complexity of word attempts. However, both atypical infants and typical infants with hearing loss were significantly less accurate than normal hearing infants in consonant and word production. Early measures of syllable production predicted unique variance in later speech production and vocabulary outcomes.The transition from babble to words in infants with hearing loss appears to be delayed but parallel to that of infants with normal hearing. These delays appear to exert significant influences on expressive vocabulary development. Parents may appreciate knowing that some children with hearing loss may develop early vocabulary at a slower rate than children with normal hearing. Clinicians should monitor landmarks from babble onset through transitions to words. Indicators of atypical development were delayed and/or limited use of syllables with consonants, vowel errors and limited production of recognizable words.