This study questioned the inner knowledge that children between the ages of eight and seventeen have about the structure underlying the spoken form of certain complex derived words of their language. Complex derived words are those suffixed words involving systematic changes in the sounds of the base word in the derived word. For example, in the pair of words distort-distortion, the addition of the suffix -ion has changed the final [s] sound of the base verb ">distort to an [ŝ] sound in the derived noun distortion. Such changes between base and derived word are predictable; whenever -ion is suffixed onto a base verb, the final consonant of the base becomes palatalised in the derived noun. This study investigated when children learn that distort bears the same systematic relations to distortion that relate bears to relation. By testing word learning and recall behaviour and comparing this to production and intuition performance, the study shows how and when children learn that complex derived words are not unanalysable wholes but rather can be derived from their underlying morphemic constituents.