Three experiments investigated the extent to which children of various intellectual abilities rely on speech-related processes in working memory. Subjects consisted of 16 learners with mental retardation (MRLs) in grades 5-9 and 16 nondisabled learners (NLs) in grades 2-3, matched in word recognition skills. The independent variable within each experiment was the phonemic content of verbal stimuli. In a word memory task, MRLs showed no decrement in performance with phonemically similar word lists, whereas NLs recalled fewer words from lists containing phonemically similar words. In a listening comprehension task, both groups evidenced similar decreases in accuracy when sentences contained phonemically similar words. In a reading comprehension task, although MRLs read more slowly overall, they showed no decrement in reading speed on sentences containing phonemically similar words, whereas NLs tended to read phonemically similar sentences more slowly than normal sentences. Results suggest that ineffective use of phonemic coding in working memory may be contributing to the reading difficulties fo MRLs. (Contains approximately 60 references.) (Author/JDD)