In this study, 22 children, ages 6:0 to 6:11, who misarticulated word-initial [r] as [w], were compared to 13, age-matched normally articulating children for their ability to identify and discriminate seven synthetic stimuli representing an acoustic continuum between [we] and [re]. Discrimination was tested among 3-step continuum stimulus pairs using the 4IAX paradigm. All of the control children demonstrated a single, sharp phonemic boundary during identification and higher between-phoneme than within-phoneme discrimination ability. Most of the misarticulating children demonstrated abnormal identification functions, with many showing only chance-level responses. Discrimination ability of the misarticulating children was generally poorer than that of the normally articulating children. Furthermore, discrimination ability of children in both groups was largely predictable from their identification performance, assuming categorical perception of these stimuli. Results indicate that a majority of the 6-year-old [r]-misarticulating children have failed to phonemically distinguish /r/ from /w/. These results call into question the use of the liquid gliding process as a psychological processing description of the misarticulation of these children.