We used neurophysiological and behavioral measures to examine whether children with specific language impairment (SLI) have deficits in automatic processing of brief, phonetically similar vowels, and whether attention plays a role in such deficits. The neurophysiological measure mismatch negativity (MMN) was used as an index of discrimination in two tasks; one in which children ignored the auditory stimuli and watched a silent video and a second in which they attended to the auditory modality. Children with SLI showed good behavioral discrimination, but significantly poorer behavioral identification of the brief vowels than the children with typical language development (TLD). For the TLD children, two neurophysiological measures (MMN and a later negativity, LN) indexed discrimination of the vowels in both tasks. In contrast, only the LN was elicited in either task for the SLI group. We did not see a direct correspondence between the absence of MMN and poor behavioral performance in the children with SLI. This pattern of findings indicates that children with SLI have speech perception deficiencies, although the underlying cause may vary.