This study followed the development of reading speed, reading accuracy, and spelling in transparent Finnish orthography through Grades 2, 3, and 8. We compared two groups of children with familial risk for dyslexia, with or without dyslexia in Grade 2 (Dys_FR, n = 35 and NoDys_FR, n = 66) to a group of children without familial risk and dyslexia (Controls, n = 72). The Dys_FR group showed persisting deficiency especially in reading speed, and, to a minor extent, in reading and spelling accuracy. The Dys_FR children, contrary to the other two groups, relied heavily on letter-by-letter decoding in Grades 2 and 3. In children not fulfilling the criteria for dyslexia in Grade 2, the familial risk did not substantially affect the subsequent development of literacy skills.