Although verbal memory deficits are frequently reported in reading disabled children, the specific mechanisms underlying these impairments have yet to be clearly defined. The present study used the California Verbal Learning Test-Children's Version (CVLT-C) to assess verbal learning in 57 dyslexic children and 114 controls matched for gender, age, and WISC-R Vocabulary score. Three areas of verbal memory were investigated: Recall and recognition, use of learning strategies, and interference effects. The dyslexic group learned the list items more slowly, recalled fewer words on the last learning trial and the delayed trials, and performed less well on the recognition condition. Dyslexics and controls displayed similar vulnerability to interference, but group differences were evident in serial position effects. Taken together, our data suggest that dyslexics have less efficient rehearsal and encoding mechanisms, resulting in deficient encoding of new information, but normal retention and retrieval.