These days, illiteracy is still a major problem. There is empirical evidence that auditory phoneme discrimination is one of the factors contributing to written language acquisition. The current study investigated auditory phoneme discrimination in participants who did not acquire written language sufficiently. Auditory phoneme discrimination was analyzed in illiterate adults and literate controls by recording event-related brain potentials (ERPs) while participants listened to standard and deviant phonemes (oddball paradigm). The results showed that only literate controls yielded mismatch negativity (MMN), the characteristic ERP marker for auditory discrimination. In illiterates, no discernible MMN was observed. These findings indicate the importance of written language acquisition for the development and maintenance of auditory phoneme discrimination. The reduced ability in discriminating phonemes in adult illiterates suggests potential training measures concerning literacy acquisition in these adults.