Objective: To examine psychiatric morbidity and functional impairment of adolescents with and without poor reading skills during mid- to late adolescence. Method: The sample consisted of 188 adolescents, 94 with poor reading skills and 94 with typical reading skills, screened from a larger sample in the public schools at age 15. To assess psychiatric disorders, participants were assessed annually with the Schedule for Affective Disorders and Schizophrenia for School-Age Children-Epidemiologic Version (up to 4.5 years; maximum age, 20 years). Functional impairment was assessed with the Child and Adolescent Functional Assessment Scale. Results: Adolescents with poor reading skills evidenced higher rates of current attention-deficit/hyperactivity, affective, and anxiety disorders, particularly social phobia and generalized anxiety disorder. Anxiety disorders but not affective disorders were related to reading status after controlling for attention-deficit/hyperactivity disorder. Adolescents with poor reading evidenced more functional impairment across multiple areas than youths with typical reading skills, even after considering the presence of comorbid attention-deficit/hyperactivity disorder. Conclusions: The increased psychiatric morbidity and functional impairment of adolescents with reading problems highlight the importance of developing interventions that help these youths address reading deficits and associated vulnerabilities during the last years of secondary school.