This Study investigated whether the pseudoword repetition difference between poor and normal readers could be explained by differences in memory for verbal materials or in familiarity with the composition of verbal materials. Dutch second graders and poor readers scoring in the same range on a word-reading test repeated pseudowords that varied in length and wordlikeness. The pseudoword repetition deficit of poor readers reported in the literature was replicated. Although the repetition scores were influenced by pseudoword length and wordlikeness, no interaction with reader group was found, thus indicating that neither variable represented a causal factor in the poor readers' repetition deficit. Statistical correction for reader group differences on a phoneme detection task and an auditory discrimination task made the pseudoword repetition difference disappear. We conclude that the basic problem is unlikely to be with subvocal rehearsal, and that the cause of the repetition deficit is already operative in early, perceptual stages of processing.