The development of the ability to categorize speech sounds is often viewed as occurring primarily during infancy via perceptual learning mechanisms. However, a number of studies suggest that even after infancy, children’s categories become more categorical and well defined through about age 12. We investigated the cognitive changes that may be responsible for such development using a visual world paradigm experiment based on (McMurray, Tanenhaus, & Aslin, 2002). Children from 3 age groups (7–8, 12–13, and 17–18 years) heard a token from either a b/p or s/∫ continua spanning 2 words (beach/peach, ship/sip) and selected its referent from a screen containing 4 pictures of potential lexical candidates. Eye movements to each object were monitored as a measure of how strongly children were committing to each candidate as perception unfolds in real-time. Results showed an ongoing sharpening of speech categories through 18, which was particularly apparent during the early stages of real-time perception. When analysis targeted to specifically within-category sensitivity to continuous detail, children exhibited increasingly gradient categories over development, suggesting that increasing sensitivity to fine-grained detail in the signal enables these more discrete categorizations. Together these suggest that speech development is a protracted process in which children’s increasing sensitivity to within-category detail in the signal enables increasingly sharp phonetic categories.