This experiment examined the vowel responses of severely disabled readers and normal control children in reading orthographically regular nonwords. The disabled readers were divided into three groups based on their relative Verbal and Performance IQs. Following the rationale of Fowler, Shankweiler, and Liberman (1979), vowel responses were classified as incorrect or correct. Correctness was determined according to either context-free or context-dependent criteria. The main finding was that the vowel responses of two out of three reading disabled groups paralleled those of their reading level peers. However, disabled readers with higher Performance than Verbal IQs made significantly more context-free responses and significantly fewer context-dependent responses than all other groups. Moreover, knowledge of how speech is segmented at the phonemic level predicted performance on the reading task. The findings suggest that disabled readers employ very local (context-independent) strategies in reading; these findings are discussed in terms of the idea that disabled readers suffer a basic deficit in phonological processing (Liberman, Liberman, & Mattingly, 1980) or linguistic processing (Siegel & Ryan, 1984).