A core difficulty in developmental dyslexia is the accurate specification and neural representation of speech. We argue that a likely perceptual cause of this difficulty is a deficit in the perceptual experience of rhythmic timing. Speech rhythm is one of the earliest cues used by infants to discriminate syllables and is determined principally by the acoustic structure of amplitude modulation at relatively low rates in the signal. We show significant differences between dyslexic and normally reading children, and between young early readers and normal developers, in amplitude envelope onset detection. We further show that individual differences in sensitivity to the shape of amplitude modulation account for 25% of the variance in reading and spelling acquisition even after controlling for individual differences in age, nonverbal IQ, and vocabulary. A possible causal explanation dependent on perceptual-center detection and the onset-rime representation of syllables is discussed.