The aim of this functional magnetic resonance imaging study is to identify neuroanatomical substrates underlying phonological processing of segmental (consonant, rhyme) and suprasegmental (tone) units. An auditory verbal recognition paradigm was used in which native speakers of Mandarin Chinese were required to match a phonological unit that occurs in a list of three syllables to the corresponding unit of a following probe. The results show that hemispheric asymmetries arise depending on the type of phonological unit. In direct contrasts between phonological units, tones, relative to consonants and rhymes, yield increased activation in frontoparietal areas of the right hemisphere. This finding indicates that the cortical circuitry subserving lexical tones differs from that of consonants or rhymes.