BackgroundDisruptions of reading processes due to text substitutions can measure how readers use lexical information.MethodsWith eye‐movement recording, children and adults viewed sentences with either identical, orthographically similar, homophonic or unrelated substitutions of the first characters in target words. To the extent that readers rely on orthographic or phonological cues, substitutions that contain such cues should cause less disruption reading than do unrelated substitutions.ResultsOn pretarget words, there was a reliable reduction in gaze duration due to homophonic substitution only for children. On target words, we observed reliable recovery effects due to orthographic similarity for adults. On post‐target words, adults had better orthographic‐based and phonological‐based recovery abilities than children.ConclusionsThe combination of eye movement recording and the error detection paradigm offers a novel implicit paradigm for studying reading development: during sentence reading, beginning readers of Chinese may rely on phonological mediation, while skilled readers have more direct access to semantics from orthography.What is already known about this topic There is little evidence for early phonological activation during the reading of Chinese sentences among skilled Chinese readers There is a rich body of evidence supporting the view that phonological information is activated very early in alphabetic scripts, as indexed by shorter fixation durations when useful phonological information is present. What this paper adds Chinese beginning readers have early parafoveal activation of phonology during the silent reading of Chinese sentences, as indexed by the parafovea‐on‐fovea effect in the homophonic substitution condition. The early activation of phonology diminishes with the development of reading skills. Implications for theory, policy or practice The phonological parafovea‐on‐fovea effect was revealed during the silent reading of Chinese sentences for beginning readers. Chinese children may rely on phonological codes while skilled readers have more direct access to semantics from orthography. The teaching of phonological aspects of Chinese orthography is very important for beginning readers