BackgroundThis study considers the role of early speech difficulties in literacy development, in the context of additional risk factors.MethodChildren were identified with speech sound disorder (SSD) at the age of 3½ years, on the basis of performance on the Diagnostic Evaluation of Articulation and Phonology. Their literacy skills were assessed at the start of formal reading instruction (age 5½), using measures of phoneme awareness, word‐level reading and spelling; and 3 years later (age 8), using measures of word‐level reading, spelling and reading comprehension.ResultsThe presence of early SSD conferred a small but significant risk of poor phonemic skills and spelling at the age of 5½ and of poor word reading at the age of 8. Furthermore, within the group with SSD, the persistence of speech difficulties to the point of school entry was associated with poorer emergent literacy skills, and children with ‘disordered’ speech errors had poorer word reading skills than children whose speech errors indicated ‘delay’. In contrast, the initial severity of SSD was not a significant predictor of reading development. Beyond the domain of speech, the presence of a co‐occurring language impairment was strongly predictive of literacy skills and having a family risk of dyslexia predicted additional variance in literacy at both time‐points.ConclusionsEarly SSD alone has only modest effects on literacy development but when additional risk factors are present, these can have serious negative consequences, consistent with the view that multiple risks accumulate to predict reading disorders.