English speakers have to recognize, for example, that te[m] in te[m] pens is a form of ten, despite place assimilation of the nasal consonant. Children with dyslexia and specific language impairment (SLI) are commonly proposed to have a phonological deficit, and we investigate whether that deficit extends to place assimilation, as a way of probing phonological representations and phonological grammar. Children with SLI plus dyslexia, SLI only, and dyslexia only listened to sentences containing a target word in different assimilatory contexts-viable, unviable, and no change-and pressed a button to report hearing the target. The dyslexia-only group did not differ from age-matched controls, but the SLI groups showed more limited ability to accurately identify words within sentences. Once this factor was taken into account, the groups did not differ in their ability to compensate for assimilation. The results add to a growing body of evidence that phonological representations are not necessarily impaired in dyslexia. SLI children's results suggest that they too are sensitive to this aspect of phonological grammar, but are more liberal in their acceptance of alternative phonological forms of words. Furthermore, these children's ability to reject alternative phonological forms seems to be primarily limited by their vocabulary size and phonological awareness abilities.