The influence of diet on cortical processing of syllables was examined at 3 and 6 months in 239 infants who were breastfed or fed milk or soy-based formula. Event-related potentials to syllables differing in voice-onset-time were recorded from placements overlying brain areas specialized for language processing. P1 component amplitude and latency measures indicated that at both ages infants in all groups could extract and discriminate categorical information from syllables. Between-syllable amplitude differences--present across groups--were generally greater for SF infants. Responses peaked earlier over left hemisphere speech-perception than speech-production areas. Encoding was faster in BF than formula-fed infants. The results show that in preverbal infants: (1) discrimination of phonetic information occurs in early stages of cortical processing; (2) areas overlying brain regions of speech perception are activated earlier than those involved in speech production; and (3) these processes are differentially modulated by infant diet and environmental factors. (Contains 3 tables and 7 figures.)