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The study concerns reading development and its precursors in a transparent orthography. Dutch children differing in family risk for dyslexia were followed from kindergarten through fifth grade. In fifth grade, at-risk dyslexic (n = 22), at-risk non-dyslexic (n = 45), and control children (n = 12) were distinguished. In kindergarten, the at-risk non-dyslexics performed better than the at-risk dyslexics, but worse than the controls on letter-knowledge and rapid naming. The groups did not differ on phonological awareness. At-risk dyslexics read less fluently from first grade onwards than the other groups. At-risk non-dyslexics' reading fluency was at an intermediate position between the other groups at the start of reading. By fifth grade they had reached a similar level as the controls on word reading, but still lagged behind on pseudoword reading. Results further showed that the parents of the groups of at-risk children differed in educational level and reading skills. Overall, the groups of at-risk children differed on pre-reading skills as well as on reading development. These differences do not seem to stem from differences in intellectual abilities or literacy environment. Instead, the better reading skills of parents of at-risk non-dyslexics suggest that these children might have a lower genetic liability.