Tones are essential in differentiating word meanings in Mandarin and are predominantly realized through manipulation of fundamental frequency (F0). However, for children with cochlear implants (CIs), acquiring tones can be a challenge due to the limitation of CI devices in processing F0. Fortunately, research has shown that substantial CI experiences can potentially counteract the disadvantages CI children face in tonal acquisition, and help them achieve a production level similar to their normal-hearing counterparts. This study thus intends to investigate whether CI children could also perform equally well in tonal processing. Eight CI children were recruited five years after implantation, along with 16 chronological-age-and hearing-age-matched children with normal hearing. The passive oddball paradigm was used in an event-related potential (ERP) experiment, including a Tone 1/Tone 4 contrast and a Tone 2/Tone 3 contrast. Results showed that CI children had p-MMR and LDN in the Tone 1/Tone 4 contrast, and only p-MMR in the Tone 2/Tone 3 contrast. On the other hand, both groups of matched children with normal-hearing displayed LDN in Tone 1/Tone 4 and Tone 2/Tone 3 contrasts. This implies that lexical tonal processing in CI children might be less mature than that in their normal-hearing counterparts despite their near-normal performance in tonal production.