Adults learning a second language (L2) (“late learners”) have difficulty achieving a native speaker’s level of accuracy in both perception and production of L2 phonetic segments. This difficulty often results in deviant production of L2 segments that is perceived as accented speech by native speakers of that language. It is generally agreed that this failure in non native segmental production and perception is caused by previous linguistic experience with the first (L1) language. Late learners are expected to show stronger L1 effects than learners who learnt their L2 in early childhood (“early learners”). However, not all L2 phonetic segments are equally difficult for late learners. The learnability of L2 phonetic segments is thought to be perceptual in nature and depends on the perceived phonetic distance between them and the acoustically, phonetically and/or articulatorily most similar segment(s) in the learner’s L1 phonetic inventory. It is generally assumed that specific L2 segments will be perceptually related or assimilated to the most similar L1 segment(s) even if there is a detectable acoustic difference between them. The studies reported in this thesis examined Serbian-English bilinguals’ perception and production difficulties with two Australian English vowel contrasts that are not contrastive in Serbian: /e/ - /æ/ and /i:/ - //. We compared participants who began learning English before 5 years (“early”) versus those who began after 15 years (“late”). In Study 1and Study 2 early learners discriminated and produced both contrasts equally well, whereas late learners had greater difficulties perceiving and producing /e/ - /æ/. In Study 3 a priming paradigm was applied to discrimination and perceptual assimilation tasks in which the prime and target contain phonologically identical, phonetically similar or phonologically and phonetically unrelated vowels under two interstimulus intervals (ISI) that tap phonological versus phonetic levels of processing, according to prior research. Early versus late group differences suggest that discrimination and production accuracy reflect how listeners assimilate Australian English vowels to native Serbian vowels. “Early” and “late” learners related L2 vowels to L1 differently, which reflects differences in establishment of the L1 phonetic system at the time of L2 onset. / Doctor of Philosophy (PhD)