Nine-ten-and twelve-year-old children (N = 75) read aloud dominant, subordinate or ambiguous bias sentences (N = 120) that ended in a homonym (BALL). After the sentence (1,000 ms), children read aloud targets that were related to the dominant (BAT) or subordinate (DANCE) meaning of the homonym or control targets. Participants were also divided into three reading skill groups based on an independent measure of single word oral reading accuracy. There were three main developmental and reading skill findings. First, 9-year-olds and low skill readers showed lexical level facilitation in accuracy. Second, 9- and 10-year-olds or low and moderate skill readers showed lexical level facilitation in reaction time. Third, 12-year-olds or high skill readers showed sentence level facilitation in reaction time with high skill readers additionally showing sentence level inhibition in reaction time. These results show that lexical level context effects decreased and that sentence level context effects increased with development and skill. These results are discussed in terms of connectionist models of visual word recognition that incorporate distributed attractor principles.