Few reports exist on perception of lexical tones by native listeners (e.g., Mandarin Chinese) versus non-native listeners whose language lacks tone contrasts. In those few, the non-native language was English, in which pitch differences signal stress alternations. No studies have examined perception of minimal tone contrasts, of central concern to theories of nonnative speech perception [e.g., PAM: Best (1995)]. We examined categorical perception of Mandarin tone contrasts, in order to detect fine-grained performance differences [see Hall et al. (1999)] between listeners of Mandarin and of French, a nonstress language. Three tone continua were derived from natural Mandarin target utterances within carrier sentences. We interpolated on both F0 and intensity contours. First, Mandarin listeners identified the tone of target syllables within carrier sentences. Next, both French and Mandarin listeners completed A×B identification and discrimination tests on isolated syllables. Mandarin, but not French listener perceived tones quasicategorically. French listeners showed substantial sensitivity to tone contour differences, although to a lesser extent than Mandarin listeners. Thus, despite the lack of linguistically relevant pitch contrasts in their language, French listeners are not ‘‘deaf’’ to tonal variations. They simply fail to perceive tones along the lines of a well-defined and finite set of linguistic categories.