Purpose: The purpose of this study was to determine whether specific language impairment (SLI) and dyslexia are distinct developmental disorders. Method: Study 1 investigated the overlap between SLI identified in kindergarten and dyslexia identified in 2nd, 4th, or 8th grades in a representative sample of 527 children. Study 2 examined phonological processing in a subsample of participants, including 21 children with dyslexia only, 43 children with SLI only, 18 children with SLI and dyslexia, and 165 children with typical language/reading development. Measures of phonological awareness and nonword repetition were considered. Results: Study 1 showed limited but statistically significant overlap between SLI and dyslexia. Study 2 found that children with dyslexia or a combination of dyslexia and SLI performed significantly less well on measures of phonological processing than did children with SLI only and those with typical development. Children with SLI only showed only mild deficits in phonological processing compared with typical children. Conclusions: These results support the view that SLI and dyslexia are distinct but potentially comorbid developmental language disorders. A deficit in phonological processing is closely associated with dyslexia but not with SLI when it occurs in the absence of dyslexia. (Contains 3 tables, 3 figures, and 2 footnotes.)