Italian sixth graders, with and without dyslexia, read pseudowords and low-frequency words that include high-frequency morphemes better than stimuli not including any morpheme. The present study assessed whether morphemes affect (1) younger children, with and without dyslexia; (2) spelling as well as reading; and (3) words with low-frequency morphemes. Two groups of third graders (16 children with dyslexia and dysorthography and 16 age-matched typically developing children) read aloud and spelt to dictation pseudowords and words. Pseudowords included (1) root + suffix in not existing combinations (e.g. lampadista, formed by lampad-, 'lamp', and -ista, '-ist') and (2) orthographic sequences not corresponding to any Italian root or suffix (e.g. livonosto). Words had low frequency and included: (1) root + suffix, both of high frequency (e.g. bestiale, 'beastly'); (2) root + suffix, both of low frequency (e.g. asprigno, 'rather sour'); and (3) simple words (e.g. insulso, 'vapid'). Children with dyslexia and dysorthography were less accurate than typically developing children. Root + suffix pseudowords were read and spelt more accurately than non-morphological pseudowords by both groups. Morphologically complex (root + suffix) words were read and spelt better than simple words. However, task interacted with morphology: reading was not facilitated by low-frequency morphemes. We conclude that children acquiring a transparent orthography exploit morpheme-based reading and spelling to face difficulties in processing long unfamiliar stimuli. Copyright © 2017 John Wiley & Sons, Ltd.