We examined the effects of presentation rate on speech perception in noise and its relation to reading in 117 typically developing (TD) children and 10 children with reading difficulties (RD) in Japan. Responses in a speech perception task were measured for speed, accuracy, and stability in two conditions that varied stimulus presentation rate: high rate and same rate conditions. TD children exhibited significantly more stable responses in the high rate condition than they did in the same rate condition. Multiple regression analyses indicated that response stability in the high rate condition accounted for a unique amount of variance in reading and mora deletion. As a group, children with RD performed less accurately than did TD children in the high rate condition, but not in the same rate condition. Findings suggest that the dependence of speech perception on stimulus context relates to reading proficiency or difficulty in Japanese children. The influences of phonology and orthography of language on the relationships between speech perception and reading are discussed. (Contains 3 figures and 5 tables.)