The deficit in verbal working memory (vWM) skills has been frequently reported in children with developmental language disorder (DLD) and may contribute to their problems in language. This study aimed to compare the phonological short-term memory (pSTM) and linguistic skills between Persian-speaking children with DLD and typical language development (TLD) to explore the role that pSTM plays in lexical and grammatical problems of children with DLD. This study included 32 Persian-speaking children who were divided into two groups of DLD (n = 16) and TLD (n = 16) within the age range from 6 to 8 years. The Persian non-word repetition test was employed as the measure of pSTM. Lexical and grammatical indices were extracted from narrative generations. Independent-samples t test was used to analyze the group-related differences in vWM, lexical, and grammatical skills. Moreover, the one-way ANCOVA analysis by controlling for NWR was utilized as the covariate to investigate the effects of vWM on linguistic performances. According to the results, the children with DLD scored significantly lower on NWR task and all lexical and grammatical measures, compared to TLD children (P < 0.01, d > 1). The group-related differences disappeared after controlling for NWR (P > 0.05). The results show that Persian-speaking children with DLD experience significant difficulties in pSTM skills, which affect their lexical and grammatical performances.