There are several independent sets of findings concerning the neural basis of reading. One set demonstrates a powerful relationship between phonological processing and reading skills. Another set reveals a relationship between visual responses in the motion pathways and reading skills. It is widely assumed that these two findings are unrelated. We tested the hypothesis that phonological awareness is related to motion responsivity in children's MT+. We measured BOLD signals to drifting gratings as a function of contrast. Subjects were 35 children ages 7–12 years with a wide range of reading skills. Contrast responsivity in MT+, but not V1, was correlated with phonological awareness and to a lesser extent with two other measures of reading. No correlation was found between MT+ signals and rapid naming, age or general IQ measures. These results establish an important link between visual and phonological processing in children and suggest that MT+ responsivity is a marker for healthy reading development.