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BACKGROUND: Developmental disorders of oral and written language have been linked to deficits in the processing of auditory information. However, findings have been inconsistent, both for behavioural and electrophysiological measures. METHODS: In this study, we examined event-related potentials (ERPs) in 20 6- to 14-year-old children with developmental dyslexia and 20 age-matched controls, divided into younger (6-11 years, n = 10) and older (11-14 years, n = 10) age bands. We focused on early (mismatch negativity; MMN) and late (late discriminative negativity; LDN) conventional mismatch responses and associated measures derived from time-frequency analysis (inter-trial coherence and event-related spectral perturbation). Responses were elicited using an auditory oddball task, whereby a stream of 1000-Hz standards was interspersed with rare large (1,200 Hz) and small (1,030 Hz) frequency deviants. RESULTS: Conventional analyses revealed no significant differences between groups in the size of the MMN to either large or small frequency deviants. However, the younger age band of children with dyslexia showed an enhanced inter-trial coherence in the theta frequency band over the time window corresponding to the MMN to small deviants. By contrast, these same children showed a reduced-amplitude LDN for the small deviants relative to their age-matched controls, whilst the older children with dyslexia showed a shorter and less intense period of event-related desynchronization over this time window. CONCLUSIONS: Initial detection and discrimination of auditory frequency change appears normal or even enhanced in children with dyslexia. Rather, deficits in late-stage auditory processing appear to be a feature of this population.