We report on an experiment designed to evaluate processing of derived forms in high-functioning dyslexics, defined as university students with a history of reading difficulties who have age-appropriate reading comprehension skills. We compared high-functioning dyslexics with a group of normal adult readers in their performance on a lexical decision task with derived items (such as cloudy and ably) and pseudo-derived items (such as belly and gravy). Some items contained an orthographic change (such as able-ably and gravy) and others did not (such as cloud - cloudy). The results indicated that although control participants' response times varied systematically as a function of morphological complexity, those of high-functioning dyslexics did not. Further, there was some evidence of a relationship between derivational processing and reading. It seems that high-functioning dyslexics have persistent difficulties in processing one particular aspect of morphology; that of derived forms.