This study examined the relationships among prosodic sensitivity, morphological awareness, and reading ability in a sample of 104 8- to 13-year-olds. Using a task adapted from Carlisle (Applied Psycholinguistics, 9 (1988) 247-266), we measured children's ability to produce morphological derivations with differing levels of phonological complexity between stem and derivation: No Change, Phonemic Change, Stress Change, and Both Phonemic and Stress Change. A 3 (Grade) x 4 (Derivation Type) analysis of variance showed that children perform significantly more poorly on both types of derivations that involve stress changes than on phonemic change and no change derivations. Regression analyses showed that both prosodic sensitivity and morphological awareness, especially in derivations that require manipulation of stress, are significant predictors of reading ability after controlling for age, verbal and nonverbal abilities, and phonological awareness.