The event-related potential (ERP) technique provides a temporally accurate measure to distinguish among different linguistic processes. Here, we measured ERPs in response to known words, pseudowords and nonwords in 24-month-old French-learning children to investigate how individual vocabulary skills contribute to the processing of native-like and non-native-like words during a listening task. The N200 was more pronounced for pseudowords than for nonwords while no difference was found between known words and pseudowords. The amplitude difference between known words and pseudowords was, however, correlated with the productive vocabulary. Toddlers with a higher vocabulary score exhibited a bigger difference than toddlers with a lower vocabulary score. Similarly for the frontally distributed late negativity, only those toddlers with higher vocabulary knowledge exhibited a gradient pattern of activity in response to three word types while children with lower vocabulary skills exhibited a similar responsiveness to each word type. Our results suggest that vocabulary skills contribute to the magnitudes of brain signals in response to native and non-native words in a non-referential listening task.