As a result of complex international migration patterns, listeners in large urban centres such as London, UK, likely encounter large amounts of variation in spoken language. However, although dealing with variation is crucial to communication, relatively little is known about how the ability to do this develops. Still less is known about how this might be affected by language background. The current study investigates whether early experience with variation, specifically growing up bilingually in London, affects accent categorization. Sixty children (30 monolingual, 30 bilingual) aged 5–7 years, were tested in their ability to comprehend and categorize talkers in 2 out of 3 accents: a home, unfamiliar regional and unfamiliar foreign-accented variety. All children demonstrated high, above-chance performance in the comprehension task, but language background significantly affected the children’s ability to categorize talkers. Bilinguals were able to categorize talkers in all accent conditions, but although all children were able to understand the talkers, monolingual children were only able to categorize talkers in the home-foreign accent condition. Overall, the results are consistent with an approach in which gradient representations of accent variation emerge alongside an understanding of how variation is used meaningfully within a child’s environment.