Developmental dyslexia is one of the most prevalent learning disabilities, thought to be associated with dysfunction in the neural systems underlying typical reading acquisition. Neuroimaging research has shown that readers with dyslexia exhibit regional hypoactivation in left hemisphere reading nodes, relative to control counterparts. This evidence, however, comes from studies that have focused only on isolated aspects of reading. The present study aims to characterize left hemisphere regional hypoactivation in readers with dyslexia for the main processes involved in successful reading: phonological, orthographic and semantic. Forty-one participants performed a demanding reading task during MRI scanning. Results showed that readers with dyslexia exhibited hypoactivation associated with phonological processing in parietal regions; with orthographic processing in parietal regions, Broca's area, ventral occipitotemporal cortex and thalamus; and with semantic processing in angular gyrus and hippocampus. Stronger functional connectivity was observed for readers with dyslexia than for control readers 1) between the thalamus and the inferior parietal cortex/ventral occipitotemporal cortex during pseudoword reading; and, 2) between the hippocampus and the pars opercularis during word reading. These findings constitute the strongest evidence to date for the interplay between regional hypoactivation and functional connectivity in the main processes supporting reading in dyslexia.