Atypical language lateralization has been marked as one of the factors that may contribute to the development of dyslexia. Indeed, atypical lateralization of linguistic functions such as speech processing in dyslexia has been demonstrated using neuroimaging studies, but also using the behavioral dichotic listening (DL) method. However, so far, DL results have been mixed. The current study assesses lateralization of speech processing by using DL in a sample of children at familial risk (FR) for dyslexia. In order to determine whether atypical lateralization of speech processing relates to reading ability, or is a correlate of being at familial risk, the current study compares the laterality index of FR children who did and did not become dyslexic, and a control group of readers without dyslexia. DL was tested in 3rd grade and in 5/6th grade. Results indicate that at both time points, all three groups have a right ear advantage, indicative of more pronounced left-hemispheric processing. However, the FR-dyslexic children are less good at reporting from the left ear than controls and FR-nondyslexic children. This impediment relates to reading fluency.