In this project, the hypothesis of an auditory temporal processing deficit in dyslexia was tested by examining auditory processing in relation to phonological skills in two contrasting groups of five-year-old preschool children, a familial high risk and a familial low risk group. Participants were individually matched for gender, age, non-verbal IQ, school environment, and parental educational level. Psychophysical thresholds were estimated for gap-detection, frequency modulation detection, and tone-in-noise detection using a three-interval forced-choice adaptive staircase paradigm embedded within a computer game. Phonological skills were measured by tasks assessing phonological awareness, rapid serial naming, and verbal short-term memory. Significant group differences were found for phonological awareness and letter knowledge. In contrast, none of the auditory tasks differentiated significantly between both groups. However, both frequency modulation and tone-in-noise detection were significantly related to phonological awareness. This relation with phonological skills was not present for gap-detection.