The present study is the first part of a longitudinal research project investigating whether children become more aware of phonemes or rhyming when they learn letters or letter sounds or even begin to read, and if so how. For the present paper, the phonological awareness of young children aged 2-6 years was analyzed, particularly their auditory knowledge of the phonemic structure of words as well as their knowledge of rhyme. Altogether, 110 children from Finnish day-care centres performed seven phonological tasks and a vocabulary size test. The results showed a clear age-dependent improvement in phonological awareness. Blending words of phonemes, separating rhyming words from each other and correcting words by substituting the wrong phoneme with the right one were found to be easier tasks for 2- to 5-year-old children than producing rhymes, twisting words or detecting an initial letter.