As part of a prospective longitudinal study of a large and representative sample of Victorian school‐aged children (the Australian Temperament Project), we assessed the prevalence of reading problems at the Grade 2 level. On the basis of scores on the ACER Primary Reading Survey ‐ Level B, we designated 16% of children as reading disabled. We did not find the usual preponderance of boys with reading problems. There was a strong association between reading problems and behavioural maladjustment, as rated by parents and teachers, particularly amongst boys. It is likely that this association is responsible for the reported excess of boys in clinical samples. Follow‐up assessments of the reading‐disabled children two years later showed that few children “recovered” to a normal level of reading. Analyses of the reading and spelling errors made by these children confirmed that deficient phonological skills are particularly characteristic of reading‐disabled children. It is suggested that more attention to the teaching of phonetic skills in the early school years is necessary to diminish the difficulties for these children in lea