Insufficient knowledge of the subtle relations between words' spellings and their phonology is widely held to be the primary limitation in developmental dyslexia. In the present study the influence of phonology on a semantic-based reading task was compared for groups of readers with and without dyslexia. As many studies have shown, skilled readers make phonology-based false-positive errors to homophones and pseudohomophones in the semantic categorization task. The basic finding was extended to children, teens, and adults with dyslexia from familial and clinically-referred samples. Dyslexics showed the same overall pattern of phonology errors and the results were consistent across dyslexia samples, across age groups, and across experimental conditions using word and nonword homophone foils. The dyslexic groups differed from chronological-age matched controls by having elevated false-positive homophone error rates overall, and weaker effects of baseword frequency. Children with dyslexia also made more false-positive errors to spelling control foils. These findings suggest that individuals with dyslexia make use of phonology when making semantic decisions both to word homophone and non-word pseudohomophone foils and that dyslexics lack adequate knowledge of actual word spellings, compared to chronological-age and reading-level matched control participants.