We explore potential similarities between developmental dyslexia (specific reading disability [SRD]) and specific language impairment (SLI) in terms of phonological skills, underlying auditory processing abilities, and nonphonological language skills. Children aged 9 to 11 years with reading and/or language difficulties were recruited and compared to chronological-age controls on phonological skills (rhyme awareness, rhyme fluency, phoneme awareness, phonological short-term memory), nonphonological language skills (vocabulary, grammatical morphology, sentence processing) and auditory processing of rise time and intensity. The SRD children performed poorly on all phonological awareness tasks and had significantly poorer rise time perception. The SLI children showed consistent impairments in phonological and nonphonological but not auditory skills. The SLI/SRD group showed consistent impairments across phonological and nonphonological skills and auditory processing. It is concluded that there is substantial overlap between these disorders at the level of phonological skills and auditory processing, and shared variance with nonphonological language skills. (Contains 6 tables and 2 figures.)