This study aims to evaluate phonological competences and their correlations with lexical abilities in 2-year-old Italian-speaking children. Eighty-eight children (46 females) aged 25-32 months participated in the study. From the total sample, three subgroups of children with different lexical skills were extracted to identify phonological characteristics of low, typical and precocious talkers. The results provide a description of the children's production in terms of consonant and correct consonant inventories; simplified and unintelligible words; and simplification processes. The percentage of unintelligible productions and the number of correct consonants show greater correlations with lexical competence. Children with low vocabulary differ significantly from the other two groups in the percentage of unintelligible words and in consonant inventories. Children with advanced vocabulary show significantly less simplification processes than the other two groups. In addition to describing phonological characteristics in a large sample of young Italian children, this study allows us to identify potential phonological markers of late linguistic development.