Focused visuo-spatial attention was studied in 10 developmental dyslexic children with impaired nonword reading, 10 dyslexic children with intact nonword reading, and 12 normally reading children. Reaction times to lateralized visual stimuli in a cued detection task showed that attentional facilitation of the target at the cued location was symmetrical in the three groups. However, dyslexics with impaired nonword reading selectively showed a lack of attentional inhibition for targets at the uncued location in the right visual field. This result was replicated in a second group of 13 dyslexics with impaired nonword reading. Individual differences in the ability of right attentional inhibition across the entire sample of dyslexics accounted for 17% of unique variance in nonword reading accuracy after controlling for individual differences in age, IQ, and phonological skills. A possible explanation based on the role of spatial attention mechanisms in the graphemic parsing process is discussed. Our results suggest that focused visuo-spatial attention may be crucial for nonword decoding.