Event-related brain potentials evoked by tone and speech stimuli were recorded in ten children with specific language impairment and a control group. The patient group showed prolonged P3 latencies in both tasks compared with the controls and smaller P3 amplitude in the speech task. There were no group differences concerning the N1-P2 components. The findings indicate that the children with language impairment showed signs of deficient late-stage auditory perceptual processing whereas the earlier sensory stages as indexed by the N1 were no different from the controls. The results are further discussed within the framework of context updating in working memory.