During development, perceptual processing is tuned to inputs in the environment such that certain frequently encountered classes of stimuli are processed more effectively than similar comparison stimuli. Letters represent a class of stimuli that are encountered frequently in the environment, at least in literate cultures. Thus, the present study examined the development of letter-specific processing in children 6-19 years old by comparing the difference between performance on a letter-matching task and an unfamiliar non-letter-matching task in different subject groups. Results revealed an increase in letter-specific processing with development. Moreover, comparisons of letter-specific processing in groups of subjects matched either in age or reading ability indicate that the emergence of letter-specific processing is linked to increased reading skill, rather than increased age per se. Findings support theories of perceptual expertise, which suggest that skilled processing drives the specialization of perceptual mechanisms for certain classes of stimuli.