Abstract A sample of 453 Australian children was followed over the first three years of schooling. A broad range of cognitive skills was assessed at the beginning of the first year at school and at the end of the third year the children were classified as retarded, backward or normal readers. At school entry, backward readers were found to be deficient in a broad range of cognitive skills, as might be expected given their lower IQs. Retarded readers, however, were found to be deficient on a more limited range of tasks, mainly involving early literacy and phonological processing skills. The implications of these findings for theories of cognitive deficit in reading retardation are discussed.