To explore how online speech processing efficiency relates to vocabulary growth in the 2nd year, the authors longitudinally observed 59 English-learning children at 15, 18, 21, and 25 months as they looked at pictures while listening to speech naming one of the pictures. The time course of eye movements in response to speech revealed significant increases in the efficiency of comprehension over this period. Further, speed and accuracy in spoken word recognition at 25 months were correlated with measures of lexical and grammatical development from 12 to 25 months. Analyses of growth curves showed that children who were faster and more accurate in online comprehension at 25 months were those who showed faster and more accelerated growth in expressive vocabulary across the 2nd year.