In this article we review findings from a recent longitudinal study of the contribution of phonological working memory to vocabulary acquisition and reading development. A total of 80 children were tested initially at school entry at the age of four years, and were tested in three further waves at ages 5, 6, and 8 years. The results indicate that phonological memory skills constrain vocabulary growth during the first year or so in school but that subsequently, vocabulary knowledge is a pacemaker in the development relationship with memory. Phonological memory skill in prereading children was found to be significantly linked with scores on a reading test at age 8 which encourages the use of a phonological recoding strategy. The theoretical and practical implications of the findings, and important areas for future research, are discussed.