To assess the success of third grade readers in segmenting written text into the ideational groupings judged appropriate by adult readers, 22 students were given two prose selections and told to mark each location where a good reader might pause or take a breath while reading a story out loud. Their pausal locations were then compared to those marked by 31 college students. The parsing performances of the third graders were analyzed according to the logic of signal detection theory, and the scores were compared with the readers' subtest scores on standardized achievement and reading diagnostic tests. The results indicated that, as a group, the third graders were surprisingly accurate in designating the correct pausal locations. Individually, poorer readers made more errors than good readers. There was also evidence that parsing performance bore a statistically significant relationship to the standardized achievement and diagnostic subtest scores. The ability to correctly segment words into syllables appeared to be the same ability that permitted readers to correctly segment the words of a text into constituent phrase structures. The results also support the hypothesis that the development of reading skills may be mediated through the development of a spatio-ideational ability called "cognitive demarcation," which may play a critical role in learning to read. (FL)