Purpose: The aim of this study was to explore when and how Mandarin-speaking children use contextual cues to normalize speech variability in perceiving lexical tones. Two different cognitive mechanisms underlying speech normalization (lower level acoustic normalization and higher level acoustic-phonemic normalization) were investigated through the lexical tone identification task in nonspeech contexts and speech contexts, respectively. Besides, another aim of this study was to reveal how domain-general cognitive abilities contribute to the development of the speech normalization process. Method: In this study, 94 five- to eight-year-old Mandarin-speaking children (50 boys, 44 girls) and 24 young adults (14 men, 10 women) were asked to identify ambiguous Mandarin high-level and mid-rising tones in either speech or nonspeech contexts. Furthermore, in this study, we tested participants' pitch sensitivity through a nonlinguistic pitch discrimination task and their working memory using the digit span task. Results: Higher level acoustic-phonemic normalization of lexical tones emerged at the age of 6 years and was relatively stable thereafter. However, lower level acoustic normalization was less stable across different ages. Neither pitch sensitivity nor working memory affected children's lexical tone normalization. Conclusions: Mandarin-speaking children above 6 years of age successfully achieved constancy in lexical tone normalization based on speech contextual cues. The perceptual normalization of lexical tones was not affected by pitch sensitivity and working memory capacity.