In the study designed by a team at the University of Sussex, it was found that canines are actually more in touch with humans than first thought.
The pups are apparently listening in on all the gossip at their family homes in an attempt to recognise the basic elements of human speech.
And they even have some form of understanding of the emotions behind our regular chit-chats.
Lead author Victoria Ratcliffe said: "We can directly compare humans and dogs to see which attributes of speech perception are uniquely human, or part of a shared mammalian history that encompasses dogs as well."
She added: "Developing our understanding of how dogs perceive human speech is obviously beneficial in improving our communication with them."
The researchers found that certain emphasised phrases, such as "come on boy", created more of a reaction from dogs.
And therefore shows the dogs are using the left-side of their brain, which in humans contains the registering of words and sounds.
“Dogs may have even been studying us for a long time.”Professor Nicholas Dodman
While with exaggerated phrases, they would be using the right side of the brain, which conveys emotions.
Ratcliffe, who reported the findings with colleague David Reby, in the Current Biology journal, say the evidence will now hopefully bring pets and owners closer together in the future.
Professor Nicholas Dodman, a lecturer of animal behaviour at Tufts University School of Veterinary Medicine in Massachusetts, says the evidence suggests dogs are a lot smarter than originally believed.
And he suggested that dogs may have even "been studying us for a long time."
He told CBS News: "No, dogs are not going to read books or compose sonnets.
"But they can take quite a bit out of what we're saying."
He added: "This is another step in our realisation that dogs are more attuned to us than we've previously recognised."