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Purpose: Children with dyslexia have been suggested to experience deficits in both categorical perception (CP) and speech identification in noise (SIN) perception. However, results regarding both abilities are inconsistent, and the relationship between them is still unclear. Therefore, this study aimed to investigate the relationship between CP and the psychometric function of SIN perception. Method: Sixteen children with dyslexia, 16 chronological- age controls, and 16 reading-level controls were evaluated in CP of a voicing continuum and in consonant identification in both stationary and fluctuating noises. Results: There was a small but significant impairment in speech identification performance of children with dyslexia in stationary noise compared with chronological age--matched controls (but not reading level--matched controls). However, their performance increased in a fluctuating background, hence suggesting normal masking and unmasking effects and preserved sensory processing of speech information. Regarding CP, location of the phoneme boundary differed in the children with dyslexia compared with both control groups. However, scrutinizing individual profiles failed to reveal consistently poor performance in SIN and CP tasks. In addition, there was no significant correlation between CP, SIN perception, and reading scores in the group with dyslexia. Conclusions: The relationship between the SIN deficit and CP, and how they potentially affect reading in children with dyslexia, remains unclear. However, these results are inconsistent with the notion that children with dyslexia suffer from a low-level temporal processing deficit and rather suggest a role of nonsensory (e.g., attentional) factors in their speech perception difficulties. [ABSTRACT FROM AUTHOR]