Spelling is a literacy skill that must be mastered during children's academic development. It involves a variety of cognitive factors, including morphological awareness. Studies in the alphabet and Chinese systems have shown that there is a close relationship between morphological awareness and spelling. Although there is clearly a significant unidirectional effect of morphological awareness on spelling significantly, few studies have explored the bidirectional relationship between morphological awareness and spelling. This three-time point longitudinal study was designed to investigate the reciprocal effects of morphological awareness and character spelling in Chinese. Participants included 124 children from two primary schools in Mainland China. The students were tracked from first grade to third grade and were administered a battery of tests to measure morphological awareness (e.g., homophone awareness, homograph awareness, and compounding awareness) and spelling to dictation, controlling for IQ, phonological awareness, and orthographic awareness. A structural equation model was utilized to examine the reciprocal relation between the students' morphological awareness and character spelling. Results showed that earlier morphological awareness predicted subsequent spelling abilities from first grade to third grade and spelling in first grade predicted morphological awareness in second grade; however, spelling in second grade did not predict the subsequent morphological awareness in third grade. This study suggests that there is a bidirectional association between morphological awareness and spelling from first grade to second grade in Chinese, and a unidirectional association between morphological awareness and spelling from second grade to third grade. Future studies could examine the causal relationship between morphological awareness and character spelling by using an instructional intervention.