Purpose: Two-year-olds produce third person singular "-s" more accurately on verbs in sentence-final position as compared with verbs in sentence-medial position. This study was designed to determine whether these sentence-position effects can be explained by perceptual factors. Method: For this purpose, the authors compared 22- and 27-month-olds' perception and elicited production of third person singular "-s" in sentence-medial versus-final position. The authors assessed perception by measuring looking/listening times to a 1-screen display of a cartoon paired with a grammatical versus an ungrammatical sentence (e.g., "She eats now" vs. "She eat now"). Results: Children at both ages demonstrated sensitivity to the presence/absence of this inflectional morpheme in sentence-final, but not sentence-medial, position. Children were also more accurate at producing third person singular "-s" sentence finally, and production accuracy was predicted by vocabulary measures as well as by performance on the perception task. Conclusions: These results indicate that children's more accurate production of third person singular "-s" in sentence-final position cannot be explained by articulatory factors alone but that perceptual factors play an important role in accounting for early patterns of production. The findings also indicate that perception and production of inflectional morphemes may be more closely related than previously thought.