Aim Very-low-birthweight (VLBW; birthweight < 1500g and/or gestational age < 32wks) children are at risk for speech problems. However, there are few studies on speech development in VLBW children at an early age. The aim of this study was to investigate phonological development in 2-year-old VLBW children. Method Twenty VLBW children without major neurosensory impairment (7 males, 13 females; mean birthweight 971g, SD 315; mean gestational age 28wks, SD 1.81) and 20 term children (7 males, 13 females; mean birthweight 3503g, SD 416; mean gestational age 40wks, SD 1.26) were compared on measures of phonological development derived from 20-minute spontaneous speech samples of standardized mother-child play interaction as well as on standardized tests of cognitive and psychomotor development, language, and behaviour. Results VLBW children had significantly fewer acquired consonants (median 9, p=0.02) and a significantly lower phonological mean length of utterance (pMLU; median 4.1, p < 0.01) than term children (median acquired consonants 10, median pMLU 5.0). Interpretation This study provides evidence for poor phonological development in even healthy VLBW children, compared with term-matched children, independent of their cognitive, psychomotor, and language development, and their behavioural functioning.