Purpose: Previous behavioral studies have found deficits in lexical--semantic abilities in children with specific language impairment (SLI), including reduced depth and breadth of word knowledge. This study explored the neural correlates of early emerging familiar word processing in preschoolers with SLI and typical development. Method: Fifteen preschoolers with typical development and 15 preschoolers with SLI were presented with pictures followed after a brief delay by an auditory label that did or did not match. Event-related brain potentials were time locked to the onset of the auditory labels. Children provided verbal judgments of whether the label matched the picture. Results: There were no group differences in the accuracy of identifying when pictures and labels matched or mismatched. Event-related brain potential data revealed that mismatch trials elicited a robust N400 in both groups, with no group differences in mean amplitude or peak latency. However, the typically developing group demonstrated a more robust late positive component, elicited by mismatch trials. Conclusions: These initial findings indicate that lexical-semantic access of early acquired words, indexed by the N400, does not differ between preschoolers with SLI and typical development when highly familiar words are presented in isolation. However, the typically developing group demonstrated a more mature profile of postlexical reanalysis and integration, indexed by an emerging late positive component. The findings lay the necessary groundwork for better understanding processing of newly learned words in children with SLI.