Individuals with dyslexia often suffer from deficient segmental phonology, but the status of suprasegmental phonology (prosody) is still discussed.In three passive-listening event-related brain potential (ERP) studies, we examined prosodic processing in literacy-impaired children for various prosodic units by contrasting the processing of word-level and phrase-level prosody, alongside segmental phonology. We retrospectively analysed school children's ERPs at preschool age for discrimination of vowel length (phoneme processing), discrimination of stress pattern (word-level prosody), and processing of prosodic boundaries (phrase-level prosody).We found differences between pre-schoolers with and without later literacy difficulties for phoneme and stress pattern discrimination, but not for prosodic boundary perception.Our findings complement the picture of phonological processing in dyslexia by confirming difficulties in segmental phonology and showing that prosodic processing is affected for the smaller word level, but not the larger phrase level.These findings might have implications for early interventions, considering both phonemic awareness and stress pattern training.