Phonological and lexical characteristics of 30-month-old children's spontaneous language samples were examined as indicators of later reading outcome. Participants were 27 children, 10 children with reading disability and 17 children without reading disability. Of the non-disabled readers, 7 were at high familial risk for reading disability, and 10 came from families with no history of reading difficulties. Children later identified as reading disabled at second grade and beyond demonstrated narrower lexical diversity and simpler phonological forms as compared to the normal reading participants. Implications of reduced phonological complexity in the productive lexicons of reading disabled children are discussed.