The inhibitory and facilitatory effects of context on word recognition were investigated in 24 8‐to 10‐year‐old children with a specific reading disability in comparison with a group of 24 children matched for reading ability and a group of 24 children matched for chronological age. To avoid confounding the effects of reading level with those of word difficulty, target words of equivalent relative familiarity for each participant were presented in congruous, neutral, and incongruous sentence contexts. In agreement with previous studies, there was clear evidence of both general inhibitory and facilitatory effects. In contrast to previous findings, however, reading level did not have a major impact on the inhibition of word recognition in incongruous contexts compared with neutral contexts, although it may have led to greater facilitation in congruous contexts compared with neutral contexts. Although further research is required, these results suggest that if reading‐age appropriate materials are selected, less skilled readers and those with a reading disability may not be as influenced by context as has been claimed pre