Purpose: Effects related to literacy acquisition have been observed at different levels of speech processing. This study investigated the link between orthographic knowledge and children's perception and production of specific speech sounds. Method: Sixty Spanish-speaking second graders, differing in their phonological decoding skills, completed a speech perception and a production task. In the perception task, a behavioral adaptation of the oddball paradigm was used. Children had to detect orthographically consistent /t/, which has a unique orthographic representation ((t)), and inconsistent /k/, which maps onto three different graphemes ((ci), (qu), and (k)), both appearing infrequently within a repetitive auditory sequence. In the production task, children produced these same sounds in meaningless syllables. Results: Perception results show that all children were faster at detecting consistent than inconsistent sounds regardless of their decoding skills. In the production task, however, the same facilitation for consistent sounds was linked to better decoding skills. Conclusions: These findings demonstrate differences in speech sound processing related to literacy acquisition. Literacy acquisition may therefore affect already-formed speech sound representations. Crucially, the strength of this link in production is modulated by individual decoding skills.