Listeners use their knowledge of how language is structured to aid speech recognition in everyday communication. When it comes to children with congenital hearing loss severe enough to warrant cochlear implants (CIs), the question arises of whether these children can acquire the language knowledge needed to aid speech recognition, in spite of only having spectrally degraded signals available to them. That question was addressed in the present study. Specifically, there were three goals: (1) to compare the language structures used by children with CIs to those of children with normal hearing (NH); (2) to assess the amount of variance in the language measures explained by phonological awareness and lexical knowledge; and (3) to assess the amount of variance in the language measures explained by factors related to the hearing loss itself and subsequent treatment. Language samples were obtained and transcribed for 40 children who had just completed kindergarten: 19 with NH and 21 with CIs. Five measures were derived from Systematic Analysis of Language Transcripts: (1) mean length of utterance in morphemes, (2) number of conjunctions, excluding and, (3) number of personal pronouns, (4) number of bound morphemes, and (5) number of different words. Measures were also collected on phonological awareness and lexical knowledge. Statistics examined group differences, as well as the amount of variance in the language measures explained by phonological awareness, lexical knowledge, and factors related to hearing loss and its treatment for children with CIs. Mean scores of children with CIs were roughly one standard deviation below those of children with NH on all language measures, including lexical knowledge, matching outcomes of other studies. Mean scores of children with CIs were closer to two standard deviations below those of children with NH on two out of three measures of phonological awareness (specifically those related to phonemic structure). Lexical knowledge explained significant amounts of variance on three language measures, but only one measure of phonological awareness (sensitivity to word-final phonemic structure) explained any significant amount of unique variance beyond that, and on only one language measure (number of bound morphemes). Age at first implant, but no other factors related to hearing loss or its treatment, explained significant amounts of variance on the language measures, as well. In spite of early intervention and advances in implant technology, children with CIs are still delayed in learning language, but grammatical knowledge is less affected than phonological awareness. Because there was little contribution to language development measured for phonological awareness independent of lexical knowledge, it was concluded that children with CIs could benefit from intervention focused specifically on helping them learn language structures, in spite of the likely phonological deficits they experience as a consequence of having degraded inputs.