BACKGROUND: Habituation, as a basic form of learning, is characterized by decreasing amplitudes of neuronal reaction following repeated stimuli. Recent studies indicate that habituation to pure tones of different frequencies occurs in fetuses and infants. AIMS: Neural processing of different syllables in fetuses and infants was investigated. STUDY DESIGN: An auditory habituation paradigm including two different sequences of syllables was presented to each subject. Each sequence consisted of eight syllables (sequence /ba/: 5× /ba/, 1× /bi/ (dishabituator), 2× /ba/; sequence /bi/: 5× /bi/, 1× /ba/ (dishabituator), 2× /bi/). Each subject was stimulated with 140 sequences. Neuromagnetic signatures of auditory-evoked responses (AER) were recorded by fetal magnetoencephalography (fMEG). SUBJECTS: Magnetic brain signals of N=30 fetuses (age: 28-39weeks of gestation) and N=28 infants (age: 0-3months) were recorded. Forty-two of the 60 fetal recordings and 29 of the 58 infant recordings were included in the final analysis. OUTCOME MEASURES: AERs were recorded and amplitudes were normalized to the amplitude of the first stimulus. RESULTS: In both fetuses and infants, the amplitudes of AERs were found not to decrease with repeated stimulation. In infants, however, amplitude of syllable 6 (dishabituator) was significantly increased compared to syllable 5 (p=0.026). CONCLUSIONS: Fetuses and infants showed AERs to syllables. Unlike fetuses, infants showed a discriminative neural response to syllables. Habituation was not observed in either fetuses or infants. These findings could be important for the investigation of early cognitive competencies and may help to gain a better understanding of language acquisition during child development.