Purpose: The purpose of this study was to determine whether the underlying phonological impairment in dyslexia is associated with a deficit in categorizing regional dialects. Method: Twenty adults with dyslexia, 20 school-age children with dyslexia, and 40 corresponding control listeners with average reading ability listened to sentences produced by multiple talkers (both sexes) representing two dialects--Midland dialect in Ohio (same as listeners' dialect) and Southern dialect in Western North Carolina. Participants' responses were analyzed using signal detection theory. Results: Listeners with dyslexia were less sensitive to talker dialect than listeners with average reading ability. Children were less sensitive to dialect than adults. Under stimulus uncertainty, listeners with average reading ability were biased toward Ohio dialect, whereas listeners with dyslexia were unbiased in their responses. Talker sex interacted with sensitivity and bias differently for listeners with dyslexia than for listeners with average reading ability. The correlations between dialect sensitivity and phonological memory scores were strongest for adults with dyslexia. Conclusions: The results imply that the phonological deficit in dyslexia arises from impaired access to intact phonological representations rather than from poorly specified representations. It can be presumed that the impeded access to implicit long-term memory representations for indexical (dialect) information is due to less efficient operations in working memory, including deficiencies in utilizing talker normalization processes.