Reciprocal relations between emerging morphological processes and reading skills were examined in a longitudinal study tracking children from Grade 1 through Grade 3. The aim was to examine predictive relationships between productive morphological processing involving composing and decomposing of inflections and derivations, reading ability for pseudoword and word decoding, and word and passage reading comprehension after controlling for initial abilities in reading, morphological processing, phonological awareness, and vocabulary. Reciprocal influences were indicated by predictive relations among initial morphological processes and later reading abilities co-occurring with relationships between initial reading abilities and later morphological processes. Using multilevel modeling, decomposing and composing were found to predict emerging word decoding and word and passage comprehension but not pseudoword decoding. Reading comprehension predicted growth in decomposing. Subsequent regression analyses of model-estimated early linear growth in predictors and later linear growth in outcomes showed that early growth in morphological processes predicted later growth in word decoding and passage comprehension. Although reciprocal relations between emerging morphological processes and reading skills were observed, the different patterns on each side of the reciprocal "coin" indicated that the mechanisms underlying predictive influences are likely different but related to quality of lexical representations. (Contains 4 figures and 8 tables.)