Previous research has shown that learners of English as a second language have difficulties in understanding connected speech spoken by native English speakers. This study examines the role of the perception of reduced forms (e.g., contraction, elision, assimilation) of English words in connected speech comprehension and the phonological skills underpinning reduced forms perception. Sixty Chinese‐speaking undergraduate students were tested with a battery of listening and phonological tasks in English. Results of regression analyses show that receptive vocabulary and perception of reduced forms contributed unique variance to listening comprehension for native English. Moreover, results further show that part‐word recognition in a speech gating task and receptive vocabulary predicted perception of reduced forms via a direct pathway, whereas phonemic awareness and phonological memory predicted perception of reduced forms via an indirect pathway (through part‐word recognition). These results have implications for the phonological skills that are fundamental to the acquisition of reduced pronunciation variants and the importance of systematic training of reduced forms perception in second language education.