The purpose of this study was to investigate the possibility of a familial lineage for dyslexia by analyzing certain auditory processing characteristics of dyslexic children and their parents. The Staggered Spondaic Word test was administered to twenty-one dyslexic children, eight to thirteen years of age, their natural parents and normal reading siblings. The experimental test data were tabulated and analyzed according to listening condition for each of the four groups: dyslexic children, normal reading siblings, affected parents and non-affected parents. A statistical analysis of the experimental data revealed significantly poorer Staggered Spondaic Word test performances for dyslexic children and their affected parents, in both the right and left competing listening conditions, when compared to test performances of their normal reading siblings and non-affected parents. These test results appear to support a genetic precursor theory for dyslexia. The experimental findings from the present investigation are discussed in terms of their clinical implications for the identification and management of dyslexic children.