Processing of relevant environmental sounds becomes increasingly specialized during early infancy. This specialization is correlated with changes in the cognitive components of the Auditory Evoked Potential (AEP). Among other factors onset latencies of AEPs in response to short auditory stimuli, such as syllables presented in isolation, decrease in the course of infant development. In general, identification of syllables within a complex speech stream is very important for language acquisition. Therefore we examined infants' ability to process syllables as separate units during their first year of life. As part of the longitudinal German Language Acquisition Development study (www.glad-study.de) we tested groups of 1-month-olds, 5-month-olds, 13-month-olds, and an adult control group. Using a simple oddball paradigm, we presented the infants with bi-syllabic consonant vowel combinations, with /da-da/ as the standard and /da-ba/ as the deviant. The duration of the gap between the two syllables of each stimulus was either 50 ms in the 'short-' or 150 ms in the 'long-gap' condition. At different stages of development infants' AEPs differed from adult AEPs in distinctive ways. Adults showed a mismatch negativity (MMN) for the detection of the second syllable in both conditions. In 1-month-olds no indicator of change detection from /da-da/ to /da-ba/ was observed. At the age of 5 months a mismatch-like response could be observed, which was restricted to the 'long-gap' condition. Finally, at the age of 13 months a mismatch-like response was elicited in both conditions, indicating the development of the ability to detect single syllables within complex sound structures.