Phonological recoding is commonly viewed as a back-up mechanism when word identification using the visual pathway fails. A second more important role for phonological recoding is as a self-teaching mechanism by which the child learns to identify words visually. Although phonological recoding may play a minor role in skilled adult reading, it plays a critical role in helping the child become a skilled reader. This article reviews the evidence relevant to these issues. The first section examines evidence on the role of phonological recoding in the development of word identification skills and reading comprehension. The next section reviews evidence showing that children with reading disabilities often have deficits in basic phonological processing skills. The third section deals with the nature of the reading problem in such children which, it is argued, is consistent with the proposed developmental analysis of the importance of phonological recoding in learning to read. The article concludes with a discussion of the teaching implications of these conclusions.