Automatic visual word recognition requires not only well-established phonological and orthographic representations but also efficient audio-visual integration of these representations. One possibility is that in developmental dyslexia, inefficient orthographic processing might underlie poor reading. Alternatively, reading deficit could be due to inefficient phonological processing or inefficient integration of orthographic and phonological information. In this event-related potential study, participants with dyslexia (N = 25) and control readers (N = 27) were presented with pairs of words and pseudowords in an implicit same-different task. The reference-target pairs could be identical, or different in the identity or the position of the letters. To test the orthographic-phonological processing, target stimuli were presented in visual-only and audiovisual conditions. Participants with and without dyslexia processed the reference stimuli similarly; however, group differences emerged in the processing of target stimuli, especially in the audiovisual condition where control readers showed greater N1 responses for words than for pseudowords, but readers with dyslexia did not show such difference. Moreover, after 300 ms lexicality effect exhibited a more focused frontal topographic distribution in readers with dyslexia. Our results suggest that in developmental dyslexia, phonological processing and audiovisual processing deficits are more pronounced than orthographic processing deficits.