In Experiment 1 children aged 8-9 and 9-10 years were tested for neighbourhood and pseudohomophone effects in nonword reading. Neighbourhood effects (N effects) were robust irrespective of group or type of nonword. Pseudohomophones were read more accurately than other nonwords but this finding was robust only for the younger 8-9-year-olds. High-frequency words were read more accurately than low-frequency words, but the reverse applied to pseudohomophones based on high- and low-frequency words, although this was not robust. Error rates for the 9-10-year-olds in Experiment 1 were low, and so it was difficult to interpret the lack of a pseudohomophone advantage for reading nonwords in this age group. Experiment 2 was therefore carried out, which consisted of a replication of the first study with a further group of 9-10-year-olds, but pronunciation latencies were measured, as well as accuracy. All the effects obtained in Experiment 1 were replicated but, in addition, an advantage for pseudohomophones in terms of pronunciation latencies was observed. The implications for accounts of reading development are discussed.