It is now well-established that there is a causal connection between children's phonological skills and their acquisition of reading and spelling. Here we study low-level auditory processes that may underpin the development of phonological representations in children. Dyslexic and control children were given a battery of phonological tasks, reading and spelling tasks and auditory processing tasks. Potential relations between deficits in dyslexic performance in the auditory processing tasks and phonological awareness were explored. It was found that individual differences in auditory tasks requiring amplitude envelope rise time processing explained significant variance in phonological processing. It is argued that developmentally, amplitude envelope cues may be primary in establishing well-specified phonological representations, as these cues should yield important rhythmic and syllable-level information about speech. Copyright © 2004 John Wiley & Sons, Ltd.