This study explores the cognitive basis of reading disabilities (RDs) in Spanish-speaking children who are learning English as a second language. Children (N = 393) designated as English language learners (ELLs) or bilingual with and without RDs in Grades 1, 2, and 3 were administered a battery of cognitive (short-term memory, working memory, rapid naming, random letter and number generation), vocabulary, and reading measures in both Spanish and English. Four important findings emerged. First, children at risk for RD and ELL children share common problems in English phonological processing and naming speed, as well as on language general measures of working memory and ratings of classroom attention. Second, children at risk for RD in both bilingual and ELL samples share similar cognitive difficulties, but Spanish phonological processing partials out performance differences between RD and non-RD groups only in the bilingual sample. Third, differences among RD subgroups were isolated to measures of classroom inattention, English naming speed, and phonological processing. Fourth, performance as a function of language status and RD was related to a language general working memory factor. In general, the results support the notion that Language 1 phonological processing as well as a general working memory system underlie second-language acquisition and RD in children whose first language is Spanish.