Children with specific language impairment (SLI) who show impaired phonological processing are at risk of developing reading disabilities, which raises the question of phonological impairment commonality between developmental dyslexia (DD) and SLI. In order to distinguish the failing phonological processes in SLI and DD, we investigated the different steps involved in speech processing going from perceptual discrimination through various aspects of phonological memory. Our results show that whereas the memory for sequence is likewise impaired in either disorder, children with SLI have to face additional impairment in phonological discrimination and short-term memory, which may account for even poorer phonological awareness than dyslexics'.