"By 12 months of age they know people speak different languages and don't use words in the same way."
The study was done using the general premise of babies' "looking time", where youngsters are repeatedly shown an object which is labelled with a made-up word in this case "medo".
That teaching event is then followed up with a test event, where the baby is shown a second toy but it is also labelled with the same name.
This causes the babies to look for longer because they have detected the anomaly; that the two different objects have the same name. "That shows that they're learning the word."
Dr Henderson said babies as young as nine months understood this.
In the new study, babies were shown one person singing nursery rhymes in English and another in French.
The babies are then taught a word by the French speaker, followed by the English speaker.
"If babies don't get the difference between languages and assume that everybody knows the same words that they know and that all languages are the same, they would expect that English person to call the same object the 'medo' as the French person did. But that's not what we found," Dr Henderson said.
"So when the new language person comes in and she calls the different object the 'medo', they didn't look longer at anything so nothing surprised them. So they didn't generalise the rules of the language from one language to the other language."
Dr Henderson said people often thought babies absorbed language passively, which they did, but she said they were not learning it "willy-nilly".
"They're being smart and making distinctions about the words they hear and use. They actually have the tools and the ability to actively learn things."
She encouraged parents to talk to their children all the time.
"People think it's only when their children are producing language that they're really learning but they're doing a whole lot of stuff well before that."
Hamilton mother of two Katy Ritchie said her 13-month-old, Emma, was beginning to speak and associate words with objects.
Mrs Ritchie, who runs the "Things to do with preschoolers in Hamilton" Facebook page, said she had read to Emma from an early age and now the toddler was keenly aware of books.
"She likes My Cat Likes to Hide in Boxes. She really responds and points to the cat on the pages of the book.
"She recently said hat twice when she was putting a hat on her head so I think it was more than a coincidence."
Mrs Ritchie agreed babies were "definitely smart". "They pick up a lot more than you might realise and are learning all the time and every experience is a learning experience."
She had witnessed a bilingual baby tell his Kiwi father in English he wanted milk, while he knew to use the German word with his mother.
Dr Henderson said the Early Learning Lab would conduct studies on bilingual and multilingual children soon.
