This study investigates perception and production of the Catalan mid-vowel /e/-/ɛ/ contrast by two groups of 4.5-year-old Catalan–Spanish bilingual children, differing in language dominance. Perception was assessed with an XAB discrimination task involving familiar words and non-words. Production accuracy was measured using a familiar-word elicitation task. Overall, Catalan-dominant bilingual children outperformed Spanish-dominant bilinguals, the latter showing high variability in production accuracy, while being slightly above chance level in perception. No correlation between perception and production performance could be established in this group. The effect of language dominance alone could not explain the Spanish-dominant participants’ performance, but quality of Catalan input (native vs. accented speech) was identified as an important factor behind familiar-word production and the inaccurate representation of the target contrast in the lexicon of the bilinguals’ less-dominant language. More fine-grained measurements of experience-related factors are needed for a full understanding of the acquisition of challenging contrasts in bilingual contexts.