Two experiments examined the hypothesis that L1 phonological awareness plays a role in children's ability to extract morphological patterns of English as L2 from the auditory input. In Experiment 1, 84 Chinese-speaking third graders were tested on whether they extracted the alternation pattern between the base and the derived form (e.g., "inflate"--"inflation") from multiple exposures. Experiment 2 further assessed children's ability to use morphological cues for syntactic categorization through exposures to novel morphologically varying forms (e.g., "lutate" vs. "lutant") presented in the corresponding sentential positions (noun vs. verb). The third-grade EFL learners revealed emergent sensitivity to the morphological cues in the input but failed in fully processing intraword variations. The learners with poorer L1 PA were likely to encounter difficulties in identifying morphological alternation rules and in discovering the syntactic properties of L2 morphology. In addition to L1 PA, L2 vocabulary knowledge also contributed significantly to L2 morphological learning.