Purpose: The purpose of this study was to improve standardized language assessments among bilingual toddlers by investigating and removing the effects of bias due to unfamiliarity with cultural norms or a distributed language system. Method: The Expressive and Receptive Bayley-III language scales were adapted for use in a multilingual country (Singapore). Differential item functioning (DIF) was applied to data from 459 two-year-olds without atypical language development. This involved investigating if the probability of success on each item varied according to language exposure while holding latent language ability, gender, and socioeconomic status constant. Associations with language, behavioral, and emotional problems were also examined. Results: Five of 16 items showed DIF, 1 of which may be attributed to cultural bias and another to a distributed language system. The remaining 3 items favored toddlers with higher bilingual exposure. Removal of DIF items reduced associations between language scales and emotional and language problems, but improved the validity of the expressive scale from poor to good. Conclusions: Our findings indicate the importance of considering cultural and distributed language bias in standardized language assessments. We discuss possible mechanisms influencing performance on items favoring bilingual exposure, including the potential role of inhibitory processing.