Purpose: This longitudinal study examines measures of temporal auditory processing in pre-reading children with a family risk of dyslexia. Specifically, it attempts to ascertain whether pre-reading auditory processing, speech perception, and phonological awareness (PA) reliably predict later literacy achievement. Additionally, this study retrospectively examines the presence of pre-reading auditory processing, speech perception, and PA impairments in children later found to be literacy impaired. Method: Forty-four pre-reading children with and without a family risk of dyslexia were assessed at three time points (kindergarten, first, and second grade). Auditory processing measures of rise time (RT) discrimination and frequency modulation (FM) along with speech perception, PA, and various literacy tasks were assessed. Results: Kindergarten RT uniquely contributed to growth in literacy in grades one and two, even after controlling for letter knowledge and PA. Highly significant concurrent and predictive correlations were observed with kindergarten RT significantly predicting first grade PA. Retrospective analysis demonstrated atypical performance in RT and PA at all three time points in children who later developed literacy impairments. Conclusions: Although significant, kindergarten auditory processing contributions to later literacy growth lack the power to be considered as a single-cause predictor; thus results support temporal processing deficits’ contribution within a multiple deficit model of dyslexia.