Auditory evoked potentials (AEP) were recorded for a 500‐msec period from the temporal language processing areas of the left (LH) and right hemispheres (RH) of 6 male and 6 female four‐year‐old children in response to 4 synthetically generated bilabial stop consonants with voice onset time (VOT) values of 0, +20, +40, and +60 msec. AEPs were averaged for each VOT condition and then factor analyzed [Molfese, 1976]. Four factors accounting for 65% of the total variance were extracted. Factor scores for these orthogonal factors were then submitted to a 2(sex) × 2(Hemisphere) × 4 (VOT) ANOVA. In this way, components of the brain‐response were identified which reflected the following: (1) sensitivity to VOT changes that crossed the phoneme boundary (F= 11.82, df + 3, 80,p<0.01), (2) specific RH involvement in the categorical perception process (F= 3.58, df = 3, 30,p<0.05), (3) sex differences in RH activity (F= 6.24, df = 1, 10,p<0.05), and (4) general hemisphere differences (F= 8.77, df = 1, 10,p<0.01). These results support the notion that speech perception is a multidimensional process dependent on mechanisms within both hemispheres. Developmental issues are also addressed.