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This article reviews 95 publications (based on 21 independent samples) that have examined children at family risk of reading disorders. We report that children at family risk of dyslexia experience delayed language development as infants and toddlers. In the preschool period, they have significant difficulties in phonological processes as well as with broader language skills and in acquiring the foundations of decoding skill (letter knowledge, phonological awareness and rapid automatized naming [RAN]). Findings are mixed with regard to auditory and visual perception: they do not appear subject to slow motor development, but lack of control for comorbidities confounds interpretation. Longitudinal studies of outcomes show that children at family risk who go on to fulfil criteria for dyslexia have more severe impairments in preschool language than those who are defined as normal readers, but the latter group do less well than controls. Similarly at school age, family risk of dyslexia is associated with significantly poor phonological awareness and literacy skills. Although there is no strong evidence that children at family risk are brought up in an environment that differs significantly from that of controls, their parents tend to have lower educational levels and read less frequently to themselves. Together, the findings suggest that a phonological processing deficit can be conceptualized as an endophenotype of dyslexia that increases the continuous risk of reading difficulties; in turn its impact may be moderated by protective factors. (PsycINFO Database Record