The purpose of the present study was to examine patterns of neural activity relevant to language processing in 20-month-old infants, and to determine whether or not changes in cerebral organization occur as a function of specific changes in language development. Event-related potentials (ERPs) were recorded as children listened to a series of words whose meaning was understood by the child, words whose meaning the child did not understand, and backward words. The results showed that specific and different ERP components discriminated comprehended words from unknown and from backward words. Distinct lateral and anterior-posterior specializations were apparent in EW responsiveness to the different types of words. Moreover, the results suggested that increasing language abilities were associated with increasing cerebral specialization for language processing over the temporal and parietal regions of the left hemisphere.