Although phonological deficits are unanimously recognized as one of the key manifestations of developmental dyslexia, a growing body of research has reported impairments in morphological abilities. Our study aimed at casting further light on this domain by investigating the morphological awareness skills of 21 children with dyslexia (mean age 9.10 years old) and 24 children with typical development (mean age 10.3 years old). All children were monolingual speakers of Italian, which is a morphologically rich language characterized by complex inflectional and derivational paradigms. We developed an experimental protocol inspired by Berko's Wug test and composed of 11 tasks addressing inflectional and derivational processes. Participants were asked to manipulate nonwords of various lexical categories, modeled after the phonotactic structure of Italian, and manipulation involved both word formation and base retrieval. Conditions of the experiments were based on verb conjugation classes differing in frequency, productivity, regularity, and formal transparency. Results confirmed that morphological skills are impaired in dyslexic children, who performed significantly more poorly than their age-matched peers in all tasks. Children with dyslexia were especially challenged by tasks and conditions requiring advanced morphological awareness skills, such as the retrieval of infinitives of infrequent and irregular conjugation classes. The educational and clinical implications of these findings are discussed.