Recognising the grammatical categories of words is a necessary skill for the acquisition of syntax and for on-line sentence processing. The syntactic and semantic context of the word contribute as cues for grammatical category assignment, but phonological cues, too, have been implicated as important sources of information. The value of phonological and distributional cues has not, with very few exceptions, been empirically assessed. This paper presents a series of analyses of phonological cues and distributional cues and their potential for distinguishing grammatical categories of words in corpus analyses. The corpus analyses indicated that phonological cues were more reliable for less frequent words, whereas distributional information was most valuable for high frequency words. We tested this prediction in an artificial language learning experiment, where the distributional and phonological cues of categories of nonsense words were varied. The results corroborated the corpus analyses. For high-frequency nonwords, distributional information was more useful, whereas for low-frequency words there was more reliance on phonological cues. The results indicate that phonological and distributional cues contribute differentially towards grammatical categorisation.