Phonological awareness is considered a key phenomenon having crucial position among abilities and processes which are important and responsible for the development of reading and writing (initial literacy). The paper deals with the significance and level of development of selected cognitive functions of a child in relation to the abilities of phonological awareness. The child’s current cognitive development is a predictor for certain level of phonological awareness. The paper is focused on a description of speech perception, language, oral vocabulary and phonological memory of children in preschool age. It is an output of the research project VEGA no. 1/0637/16 Development of a Diagnostic Tool to Assess the Level of Phonemic Awareness of Children in Preschool Age.