This study aimed to (a) explore the roles of cognitive and language variables in predicting reading abilities of two groups of individuals with reading disabilities (i.e., dyslexia and specific language impairment) and (b) examine which variable(s) is the most predictive in differentiating two groups. Inclusion/exclusion criteria applied to categorize the two groups yielded a total of 63 participants (n = 44 for the dyslexia; n = 19 for the specific language impairment). A stepwise multiple regression approach was conducted to examine which cognitive and/or language variables made the largest contribution to reading abilities (i.e., Phonetic Decoding Efficiency, Word Attack, Sight Word Efficiency, and Passage Comprehension). Results revealed that there were significant differences in which measures of cognitive and language ability predicted individuals with dyslexia and speech and language impairments reading ability, showing that the cognitive and language variables underlying their difficulty with reading abilities were not the same across the two groups. A discriminant function analysis showed that a measure of Verbal Comprehension, Phonological Awareness, and Phonetic Decoding Efficiency can be used to differentiate the two groups. These findings support the tenet that dyslexia and specific language impairment are two subgroups of reading disabilities and that thorough diagnostic evaluations are needed to differentiate between these two subgroups. Distinctions of this nature are central to determining the type and intensity of language-based interventions.