An in-depth exploration of the associations of two aspects of morphological awareness in Chinese—homophone awareness and lexical compounding awareness—to Chinese word reading and vocabulary knowledge was the primary focus of the present study. Among 154 9-year-old Hong Kong Chinese children, both lexical compounding and homophone awareness were significantly associated with word reading (r = .54 for compounding, r = .38 for homophones) and vocabulary knowledge (r = .41 for compounding, r = .53 for homophones). However, with autoregressors additionally statistically controlled, homophone awareness remained uniquely associated with vocabulary but not word reading; lexical compounding was uniquely associated with both word reading and vocabulary. Path analyses best illustrated this pattern. Both morphological awareness constructs are likely bidirectionally associated with word reading and vocabulary knowledge. However, homophone awareness is more centrally associated with vocabulary knowledge because it taps specific, existing morpheme knowledge. In contrast, lexical compounding requires structural understanding of one's language, which seems to be helpful for both learning to read and vocabulary acquisition in Chinese.