This study examines whether two frequently reported causes of dyslexia, phonological processing problems and verbal memory impairments, represent a double-deficit or whether they are two expressions of the same deficit. Two-hundred-and-sixty-seven Dutch children aged 10-14 with dyslexia completed a list-learning task and several phonological tasks, together with a number of reading and spelling tests. The results indicate that phonological deficits and verbal memory impairments in dyslexia stem from the same root, which seemingly reflects an inaccurate encoding of the phonological characteristics of verbal information. This phonological encoding deficit is a negative predictor for both the reading and spelling skills of dyslexic children.