readline (aka <>) reads until a newline or eof is encountered before returning. You want sysread since it returns as soon as data is available.

for (;;) {
   my $read = sysread($fh, my $buf, 64*1024);
   die("Can't read from pipe: $!\n") if !defined($read);
   last if !$read;
   print $buf;
}
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Thank you all for the replies. The sysread example worked exactly as I needed it to.

The code you posted lacks any mention of $|=1

You need to use strict and use warnings.

You also really need to check to see whether the open succeeded or not and print the reason when it fails.

Okay, I can write two sample programs to illustrate my question.

p1.pl

#!/usr/bin/perl

use strict;
use warnings;

$|=1;

my $p2 = "/tmp/p2.pl";

open(P2,"$p2 |") || die "P2: $p2 - $!\n";
while(<P2>) {
   print;
}
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p2.pl

#!/usr/bin/perl

use strict;
use warnings;
$|=1;

my $i;

for $i (1..10) {
   print ".";
   sleep 1;
}
print "\n";
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The output of p2.pl is 1 dot every second for 10 seconds but the output of p1.p1 is 10 dots after 10 seconds. Thanks.

The problem is in the title: "line buffered". You're reading P2 line-by-line, but printing only one line total in p2.pl in the first place. Try this in p1.pl:

#!/usr/bin/perl

use strict;
use warnings;

$|=1;

my $p2 = "./p2.pl";

open(P2,"$p2 |") || die "P2: $p2 - $!\n";
while( read( P2, $_, 1 ) ) { # fixed as per [ikegami]'s post below
    print;
}
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BTW, you should probably be using a lexical filehandle, but given the short example I won't complain too loudly. ;-)

Update: fixed bug in read as pointed out by ikegami in Re^4: Nested line buffered output.