Phonological deficits in dyslexia are typically assessed using metalinguistic tasks vulnerable to extraneous factors such as attention and memory. The present work takes the novel approach of measuring phonology using eyetracking. Eye movements of dyslexic children were monitored during an auditory word recognition task in which target items in a display (e.g., "candle") were accompanied by distractors sharing a cohort ("candy") or rhyme ("sandal"). Like controls, dyslexics showed slower recognition times when a cohort distractor was present than in a baseline condition with only phonologically unrelated distractors. However, unlike controls, dyslexic children did not show slowed recognition of targets with a rhyme distractor, suggesting they had not encoded rhyme relationships. This was further explored in an overt phonological awareness test of cohort and rhyme. Surprisingly, dyslexics showed normal rhyme performance but poorer judgment of initial sounds on these overt tests. The results implicate impaired knowledge of rhyme information in dyslexia; however they also indicate that testing methodology plays a critical role in how such problems are identified.