Aims: This study investigates how speakers of a dialect with an ongoing phonemic merger perceive across their second dialect and second language. In doing so, we examine how the predictions of PAM(-L2) and L2LP can be extended to a context of ongoing sound change in bidialectal and bilingual phonological acquisition.Design: We focus on the context of Chongqing Mandarin, a variety of Southwestern Mandarin. There is an ongoing merger between [l] and [n] in Chongqing Mandarin, but these two sounds are phonemic in listeners’ second dialect (D2), Standard Mandarin, and second language (L2), English. We assess perceptual accuracy and directionality in D2 and L2.Data: A total of 97 D1 Chongqing Mandarin speakers took part in AX discrimination and 2AFC tasks for /l/ and /n/ words in their D2 and L2. 7441 responses were analysed with mixed effects logistic regression modelling and correlation coefficients.Findings: D1 Chongqing Mandarin speakers could perceive the phonemic contrast of /l/ and /n/ above the chance level in their D2 and L2. Their perception was not biased towards [l] or [n] in D2 or L2 overall, but the perception bias in D2 was modulated by daily language use. The better speakers perceived the contrast in their D2, the better they perceived it in their L2 (R = 0.75).Originality: Previous bilingual phonological research has mainly considered acquisition of either a larger or smaller phonological system from a stable L1. We consider acquisition in the context of a merger in progress in listeners’ first linguistic variety. In addition, we consider perception in a sequentially acquired standard dialect as well as a second language.Significance: We argue that the context of acquisition from a merger in progress represents a case of Single Category assimilation as modelled by the PAM(-L2), or ‘new’ category formation in the L2LP.KeywordsSpeech perception; bilingualism; second dialect acquisition; consonant merger; Mandarin Chinese; Southwestern Mandarin