Ability of eight good and eight poor readers (in Grade 1, ages ranging from 6.7 to 7.4 yr.) to discriminate phonemic contrasts presented in 50% time-compressed sentential stimuli (Subtest 13 of the Carrow-Auditory Visual Abilities Test) was measured. Good readers exhibited a significantly higher over-all mean performance than poor readers on the time-compressed task. Effects of time-compression on the perception of manner, place, voicing and frequency contrasts showed a similar pattern of errors for both groups of readers. Implications of the effects of auditory discrimination on reading abilities are discussed.