Developmental dyslexia, a severe and persistent reading and spelling impairment, is characterized by difficulties in processing speech sounds (i.e., phonemes). Here, we test the hypothesis that these phonological difficulties are associated with a dysfunction of the auditory sensory thalamus, the medial geniculate body (MGB). By using functional MRI, we found that, in dyslexic adults, the MGB responded abnormally when the task required attending to phonemes compared with other speech features. No other structure in the auditory pathway showed distinct functional neural patterns between the two tasks for dyslexic and control participants. Furthermore, MGB activity correlated with dyslexia diagnostic scores, indicating that the task modulation of the MGB is critical for performance in dyslexics. These results suggest that deficits in dyslexia are associated with a failure of the neural mechanism that dynamically tunes MGB according to predictions from cortical areas to optimize speech processing. This view on task-related MGB dysfunction in dyslexics has the potential to reconcile influential theories of dyslexia within a predictive coding framework of brain function.functional MRI | speech recognition | auditory processing | magnocellular