The phonological skills are not the only linguistic abilities which are observed to have some influence on reading achievement in dyslexics. In addition to phonological skills, morphological skills should be also taken in consideration. The aim of this study is to extend investigation the linguistic abilities of children with dyslexia to the morphological level through examination whether there is a lack of morphological knowledge in children with dyslexia for Bosnian language with transparent orthography. Testing sample included 45 children with dyslexia that are compared with chronological age and reading level controls. The dyslexic children performed significantly worse than same age controls on all forms of word and the most complex word formation tasks. Based on the examination of standardized discriminant function coefficients the variable with the highest weight in defining the first discriminant function was the suffixal formation, declination of personal pronouns, changing gender of adjectives with regard to the gender of a noun, and changing of gender of cardinal numbers with regard to the gender of a noun best differentiates groups. Results of multivariate analyses of variance also showed that chronological age and reading level groups outperformed dyslexics on all these tasks. Our results suggest that dyslexics have problems with morphological knowledge which indicate that certain actions regarding the development of morphological abilities in dyslexics should be taken in the elementary grades.