Background: While much is known about how morphological awareness (MA) contributes to reading development, little attention has been paid to how reading may conversely affect MA development, particularly in readers of Chinese in a bilingual/multilingual setting. Methods: The study adopted a cross-lagged panel design. Young bilingual readers of Chinese were measured in MA, word reading and reading comprehension -- all in Chinese -- twice from Grade 3 to Grade 4. Results: Path analysis revealed that Grade 3 MA significantly predicted Grade 4 reading comprehension after controlling for the autoregressive effect. Over and above Grade 3 MA, Grade 3 reading also significantly predicted Grade 4 MA. Subsequent analyses, however, revealed disparate developmental patterns between those with Chinese and English, respectively, as their home language. Implications: These findings, while supporting reciprocity of developmental relationships between MA and reading, also suggested that the pattern of relationships can vary as a function of students' target language experiences in a bilingual/multilingual setting.