This review article discusses how empirical data on the acquisition of spelling by children inform the question of the psycholinguistic validity of the phoneme, a concept central (at least implicitly) to most phonological theories. The paper reviews data on children's early spelling attempts as well as on the development of spelling proficiency. The evidence highlighted in the paper presents a number of challenges for many conceptions of the phoneme, which do not account for the complexity of the developmental data. A synthetic interpretation of the apparently contradictory evidence is offered suggesting that orthographic and phonological knowledge develop together into a hierarchy of representations. While the idea of multidimensional phonological representations has been previously entertained in psycholinguistic literature, none of the previous proposals has explicitly incorporated literacy factors into modeling phonological knowledge. In this article, we show that the spelling acquisition data support and are best accounted for by models allowing for a hierarchy of representations, that learning to read and write has a profound effect on the phonological knowledge of an adult literate speaker, and finally that the traditional notion of the phoneme is too simplistic to incorporate the dynamic and multidimensional nature of phonological knowledge.