Bilingual acquisition research has so far focused on comparisons with monolingual children in terms of linguistic features, performance on standardised tests, input, etc. In contrast, new methodologies, such as eye-tracking, can offer a more detailed understanding of the way bilinguals use both language systems. Eye fixations provide evidence of online processing. This study investigates spoken word recognition in children and adults. Word retrieval is affected by the number of words that minimally differ from the target (neighbourhood). Previous research found that only bilingual adults activated a similar-sounding competitor from the other language. As children have been found to be sensitive to neighbourhood density from quite early in previous research, similar results might be expected. This study includes 56 subjects (11 German–English bilingual and 12 English monolingual children, aged 8; 21 English monolingual and 12 German–English bilingual adults). The subjects’ online processing of competing items for high- and low-density targets was compared. The results confirm that neighbourhood density affects word recognition in adults and children. The bilingual children activated same-language competitors as well as similar-sounding competitors from the other language. Adults and children differed in terms of latencies, and the monolinguals were more accurate than the bilingual subjects.