The present study investigates how categorical perception of Mandarin tones develops along age from four- to six-year-old preschoolers. The results showed that Mandarin tones could be perceived categorically by children as young as four years of age, who were able to process tones as linguistic categories. The positions of the identification boundaries did not differ significantly between children and adults, but the boundary widths did differ significantly, with much narrower boundary widths (i.e., sharper boundaries) for the six-year-old group and the adult group. Moreover, the overall discrimination accuracies for all the children groups were lower than that for the adult group. However, children as early as five years of age could discriminate between-category tone pairs almost equally well as the matching adults. These findings lead us to conclude that five to six years of age seems to be a critical period for the development and refinement of Mandarin tone perception.