We examined categorical speech perception in school-age children with developmental dyslexia or Specific Language Impairment (SLI), compared to age-matched and younger controls. Stimuli consisted of synthetic speech tokens in which place of articulation varied from "b" to "d". Children were tested on categorization, categorization in noise, and discrimination. Phonological awareness skills were also assessed to examine whether these correlated with speech perception measures. We observed similarly good baseline categorization rates across all groups; however, when noise was added, the SLI group showed impaired categorization relative to controls, whereas dyslexic children showed an intact profile. The SLI group showed poorer than expected between-category discrimination rates, whereas this pattern was only marginal in the dyslexic group. Impaired phonological awareness profiles were observed in both the SLI and dyslexic groups; however, correlations between phonological awareness and speech perception scores were not significant. The results of the study suggest that in children with language and reading impairments, there is a significant relationship between receptive language and speech perception, there is at best a weak relationship between reading and speech perception, and indeed the relationship between phonological and speech perception deficits is highly complex.