Language change often leads to the merger of phonemic categories, but the addition of new categories is rarely attested. In the Spanish city of Seville, as in other cities across the southern region of Andalusia, contact with the prestigious standard variety to the north is leading to the emergence of a contrast between /s/ and /θ/. The 24 young adult speakers from Seville analyzed in this dissertation produce a mixture of [s] and the incoming sound [θ] in standard /θ/ contexts. However, when naturalistic production is examined individually, a systematic pattern is revealed: most of the speakers categorically limit [θ] to /θ/ contexts. They are also able to distinguish [θ] from [s] in low-level perception experiments. I argue that this is evidence for an underlying phonological contrast whose effective borrowing may have been made possible, as others have suggested, by the high level of social awareness it enjoys. In a semantic priming experiment with stimuli produced by a local talker, the same speakers show a processing advantage for words with standard /θ/ that are produced with the local variant [s] over words produced with [θ]. I hypothesize that this seemingly incongruent result may be evidence for talker-based phonemic flexibility in perception. This dissertation underscores the complexity of the notion of phonemic contrast and motivates the investigation of more ongoing changes involving consonants. In general, it highlights the potential benefits of combining naturalistic and experimental approaches to variable phenomena.