A key aspect of the work of many educational and developmental psychologists is the diagnosis of literacy learning disability. One component of this disability is learning to read words automatically. This difficulty is attributed to the gradual development of phonological decoding and the related acquisition of orthographic knowledge. Unfamiliar letter strings can be decoding either overtly, by saying aloud systematically parts of a written word and then blending the parts, or subvocally. Subvocal decoding is assumed to be more mature develapmentally and to be a key acquisition. The present study examines aspects of the acquisition of subvocal decoding by monitoring the reading of pseudowords by average and low achieving third to fifth graders. Subvocal phonological decoding ability was correlated with the accuracy, comprehension, and rate components of prose reading for both categories of reading ability and was higher for the average readers. Its accuracy was influenced by the number of letters in a pseudoword and its sound structure. Low achieving reoders showed a greater sensitivity to subvocal phonological decoding than average reoders. The implications for the diagnosis of reading disabilities by educational and developmental psychologists are discussed.