People with age-related macular disease frequently experience reading difficulty that could be attributed to poor acuity, elevated crowding or unstable fixation associated with peripheral visual field dependence. We examine how the size, location, spacing and instability of retinal images affect the visibility of letters and words at different eccentricities. Fixation instability was simulated in normally sighted observers by randomly jittering single or crowded letters or words along a circular arc of fixed eccentricity. Visual performance was assessed at different levels of instability with forced choice measurements of acuity, crowding and reading speed in a rapid serial visual presentation paradigm. In the periphery: (1) acuity declined; (2) crowding increased for acuity- and eccentricity-corrected targets; and (3), the rate of reading fell with acuity-, crowding- and eccentricity-corrected targets. Acuity and crowding were unaffected by even high levels of image instability. However, reading speed decreased with image instability, even though the visibility of the component letters was unaffected. The results show that reading performance cannot be standardised across the visual field by correcting the size, spacing and eccentricity of letters or words. The results suggest that unstable fixation may contribute to reading difficulties in people with low vision and therefore that rehabilitation may benefit from fixation training.