Research suggests that morphological awareness facilitates word decoding, improves lexical knowledge, and helps reading comprehension (Carlisle, 2010; Nagy et al., 2014; Verhoeven & Perfetti, 2011). The present study examined the relationship among morphological awareness, word recognition and reading comprehension in 153 second- and fifth-grade Hebrew speakers at an elementary school in Israel. Students were given morphological awareness tests and tests for word recognition and reading comprehension. Three types of morphological awareness were analyzed: inflection, derivation and construct formation. Overall, students with low morphological awareness in derivation and construct formation showed relatively poor achievement in word recognition and comprehension. All three types were found to correlate with reading comprehension in readers with high morphological awareness. These readers also exhibited good reading skills. The results are discussed with regard to the special characteristics of Hebrew morphology and reading process, which aid morphological decomposition.