Language learners have to contend with systematic variation in the input in the form of morpho-phonological change. In particular, tone Sandhi refers to a morphophonemic alternation referring to a license tone substitution under particular conditions. Two cohorts of children (3–4 years and 4–5 years) were tested on their ability to recognize words under four different conditions. The first three conditions entailed a change in the form of a word due to i) a native phonological rule (Tone 3 Sandhi), ii) a phonologically illegal tone substitution and iii) absence of a substitution when Tone 3 Sandhi was warranted. The fourth condition consisted of the correct, unaltered form of a word, which served as a control condition. Results demonstrated that 3 to 4 year old children were not able to recognize words that were subjected to Sandhi even when Sandhi was licensed by the phonological context, although they were able to correctly identify instances where the Sandhi rule was omitted, resulting in mispronunciations. By 5 years, children were able to recognize words when Sandhi was applied correctly. Results point to a stabilization of word recognition abilities during the preschool years with respect to suprasegmental morphophonemic change.