Six-year-old children's ability to categorize words on the basis of vowel categories was examined at the beginning of first grade and again after 6 months of formal schooling. The potential effects of relative proximity of vowels in the vowel space, of syllable structure, and of input phonology were assessed. Also, the effect of literacy instruction on vowel categorization and the relationship of vowel categorization with vowel spelling and reading skill were investigated. Results indicate that the ability to categorize vowels does not develop uniformly but is affected by the degree of spectral/articulatory proximity between vowels, by syllable structure, and potentially by characteristics of the input phonology. Error analyses further indicate that children have fuzzy category boundaries between vowels adjacent on the height continuum. The pattern of results on oral categorization and written tasks suggests a reciprocal relationship. Categorization ability improved after 6 months of schooling. However, vowels that children found more difficult to categorize were also more difficult to read and spell.