This family-risk (FR) study examined whether the literacy skills of parents with dyslexia are predictive of the literacy skills of their offspring. We report data from 31 child–parent dyads where both had dyslexia (FR-D) and 68 dyads where the child did not have dyslexia (FR-ND). Findings supported the differences in liability of FR children with and without dyslexia: the parents of the FR-D children had more severe difficulties in pseudoword reading and spelling accuracy, in rapid word recognition, and in text reading fluency than the parents of the FR-ND children. Finally, parental skills were found to be significant predictors of children's Grade 3 reading and spelling. Parental skills predicted children's reading and spelling accuracy even after controlling for children's preschool skills. Our findings suggest that the literacy skills of a parent with dyslexia might be valuable in assessing early on their child's liability to dyslexia. Copyright © 2011 John Wiley & Sons, Ltd.