The general aim of this thesis was to identify the indicators of reading disability and to analyze the effect of these factors in preschool age children in order to determine which factors play a principal role in the development of dyslexia. Various theories of developmental dyslexia have been investigated and the key components of major theories are presented in this paper. It is a generally held view that dyslexia is caused by a deficit in phonological processing which is an inability to understand the sound structure of language. This thesis aims to unite current research findings in order to better classify dyslexia as well as to determine approaches to intervention which are critical to a preschool child’s development of literacy. Three studies were conducted. The goal of study 1 was to determine the discrepancies in performance between non-dyslexic readers and dyslexic readers. Study 2 investigated phonological awareness abilities in preschool age children and their relationship with intelligence. An intervention study was then carried out on the preschool participants to determine the effects of instruction in the alphabetic principle on elements related to intelligence and phonological awareness. The results of this thesis and the studies conducted herein found a wide range of domains that were causal to reading disability. These include visuo-spatial discrimination skills, phonological knowledge and working memory. These studies also indicate that early identification of weaknesses in these areas can be mediated by well informed instruction in letter-sound correspondence and can be a critical determinant of future reading ability.