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A relationship between brain responses at birth and later emerging language and reading skills have been shown, but questions remain whether changes in brain responses after birth continue to predict the mastery of language-related skills such as reading development. To determine whether developmental changes in the brain-based perceptual skills are systematically related to differences in word-level reading proficiency at age 8 years, brain event-related potentials (ERPs) to speech and nonspeech stimuli were recorded annually at the ages of 1 through 8 years in a sample of 109 typically developing children. Two measures of word-level reading (one that requires decoding of real words and one of pseudowords) were administered at age 8 years. Growth curve analysis, using the hierarchical linear models, related reading performance (average versus low) to the longitudinal maturation in the ERP waveform peak and latencies. Maturational changes (e.g., slope, acceleration, and cubic growth) in N1 amplitude from ages 1 to 4 were related to proficiency in decoding pseudoword stimuli only, with children who were less proficient in decoding pseudowords evidencing more steeply negative declines in amplitude with age, particularly at the frontal and parietal recording sites in response to both speech and nonspeech stimuli. In contrast, proficiency in decoding real words was related to developmental changes in N2 amplitudes from ages 4 to 8 only at the parietal recording site, and only in response to nonspeech stimuli. The early development of biologically based differences in the perception and processing of auditory information contributes to later group differences in reading proficiencies at school age.