In many languages, significant numbers of words are used in more than one grammatical category; English, in particular, has many words that can be used as both nouns and verbs. Such "ambicategoricality" potentially poses problems for children trying to learn the grammatical properties of words and has been used to argue against the logical possibility of learning grammatical categories from syntactic distribution alone. This article addresses how often English-learning children hear words used across categories, whether young language learners might be sensitive to perceptual cues that differentiate noun and verb uses of such words and how young speakers use ambicategorical words. The findings suggest that children hear considerably less cross-category usage than is possible and are sensitive to perceptual cues that distinguish the two categories. Furthermore, in early language production, children's cross-category production mirrors the statistics of their linguistic environments, suggesting that they are distinguishing noun and verb uses of individual words in natural language exposure. Taken together, these results indicate that cues in the speech stream may help children resolve the ambicategoricality problem. (Contains 5 tables, 7 figures, and 3 footnotes.)