Non-word repetition (NWR) is often utilized for the assessment of phonological short-term memory (PSTM) and as a clinical marker for language-related disorders. In this study, associations between children's language competence and their performance in language-specific NWR tasks as well as the relevance of NWR for the prediction of language development were scrutinized. German preschoolers (N = 1,801) were compared regarding their performance in NWR, German vocabulary, and articulation. For 141 children, results of a school enrolment test were available. Multilingual children performed as well as monolingual German-speaking children in NWR only under the condition of comparable German language skills. NWR performance depended on item length, children's vocabulary and articulation skills and was weakly associated with language-related medical issues. The predictive power of NWR for children's performance in the school enrolment test was minimal. To conclude, chosen German-based NWR tasks did not deliver convincing results as a clinical marker or predictor of language development.