Inference making is fundamental to the construction of a coherent mental model of a text. We examined how vocabulary and verbal working memory relate to inference development concurrently and longitudinally in 4- to 9-year-olds. Four hundred and twenty prekindergartners completed oral assessments of inference making, vocabulary breadth, vocabulary depth, and verbal working memory each year until Grade 3. Concurrently, hierarchical regressions revealed that a greater proportion of total variance in inference making was explained by vocabulary and verbal working memory for younger than older children. Vocabulary breadth was a stronger predictor of inference than verbal working memory, but the opposite pattern was found for vocabulary depth and verbal working memory. The longitudinal relations between inference making, vocabulary, and verbal working memory were investigated in two separate cross-lagged models: one with vocabulary breadth and a second with vocabulary depth. Both vocabulary breadth and depth explained subsequent inference making and verbal working memory throughout the early grades. Inference making also predicted subsequent vocabulary depth. The results highlight the critical role of vocabulary knowledge in the development of inference ability both within and across time, the importance of vocabulary in supporting the development of verbal working memory, and the changing dynamics between language and memory in early development. [This article was co-written by the Language and Reading Research Consortium.]