This thesis investigates the perceptual correlates of Taiwanese tone sandhi. Two experiments were performed. In the first study speakers of English were asked to distinguish whether pairs of words (which are either the same word, a pair with a sole difference in tone, or neutralized) heard were the same or different. Accuracy results on this study show that English speakers have difficulty distinguishing tones. In the second experiment, Taiwanese speakers were given the same task, except the pairs were modified to have the same vowel length duration. Accuracy results show that Taiwanese speakers correctly categorize different pairs and same word pairs at a much higher rate compared to English speakers. Taiwanese speakers categorized the unmodified neutralized pairs as being different more often than same, and the modified pairs as being the same more often than different. This indicates that vowel length is a significant factor in perception of neutralization.