Processing of both a word’s orthography (its printed form) and phonology (its associated speech sounds) are critical for lexical identification during reading, both in beginning and skilled readers. Theories of learning to read typically posit a developmental change, from early readers’ reliance on phonology to more skilled readers’ development of direct orthographic-semantic links. Specifically, in becoming a skilled reader, the extent to which an individual processes phonology during lexical identification is thought to decrease. Recent data from eye movement research suggests, however, that the developmental change in phonological processing is somewhat more nuanced than this. Such studies show that phonology influences lexical identification in beginning and skilled readers in both typically and atypically developing populations. These data indicate, therefore, that the developmental change might better be characterised as a transition from overt decoding to abstract, covert recoding. We do not stop processing phonology as we become more skilled at reading; rather, the nature of that processing changes.