Purpose: The effects of neighborhood density (ND) and lexical frequency on word recognition and the effects of phonotactic probability (PP) on nonword repetition (NWR) were examined to gain insight into processing at the lexical and sublexical levels in typically developing (TD) children and children with developmental language problems. Method: Tasks measuring NWR and word recognition were administered to 5 groups of children: 2 groups of TD children (5 and 8 years old), children with specific language impairment (SLI), children with reading impairment (RI), and children with SLI + RI (all 7-8 years old). Results: High ND had a negative effect on word recognition in the older TD children and in the children with RI only. There was no ND effect in the younger children or in the children with SLI, who all had lower receptive vocabulary scores than the age-matched TD children and the RI groups. For all groups, NWR items with low PP were more difficult to repeat than items with high PP. This effect was especially pronounced in children with RI. Conclusion: Both the stage of vocabulary development and the type of language impairment (SLI or RI) impact the way ND and PP affect word recognition and NWR.