Several theoretical and descriptive challenges are presented by children's phonological substitution errors which interact to yield the effect of a chain shift. Drawing on an archival study of the sound systems of five children (ages 3;5 to 4;0) with normal development and 47 children (ages 3;4 to 6;8) with phonological delay, one such chain shift, namely the replacement of target /Θ/ by [f] and the replacement of /s/ by [Θ/, was identified in the speech of six children from the two subgroups. Different derivational and constraint-based accounts of the chain shift were formulated and evaluated against the facts of change and the children's presumed perceptual abilities. An adequate account in either framework was found to require the postulation of underspecified and, in some instances, nonadult-like underlying representations. Such representations were able to reconcile within a single-lexicon model the presumed production/perception dilemma commonly associated with acquisition. Continuity was also preserved by limiting underlying change to just those lexical items which exhibited a change phonetically.