This study examined the role of phonological memory in second language (L2) grammar learning in a group of native French-speaking children undergoing a 5-month intensive English program. Phonological memory (as referenced by Arabic [ANWR] and English [ENWR] nonword repetition tasks), L2 vocabulary (receptive and productive vocabulary knowledge), and L2 grammar (knowledge of morphosyntactic structures) were assessed during the first (Time 1) and last (Time 2) month of the program. After controlling for initial grammar ability, phonological memory significantly predicted grammar development (27.9% of variance explained) in addition to the contribution made by vocabulary knowledge (9.5% of variance explained). Although phonological memory ability as measured by ENWR increased between Time 1 and Time 2, ANWR did not improve. The findings show that phonological memory plays an important role in L2 grammar development that is unmediated by lexical knowledge. They also provide evidence that phonological memory improves with language development, but that basic phonological memory capacity (as measured by ANWR in this study) remains unchanged over time.