This study examined the processing of derivational morphology and its association with measures of morphological awareness and literacy outcomes in 30 Dutch-speaking high-functioning dyslexics, and 30 controls, matched for age and reading comprehension. A masked priming experiment was conducted where the semantic overlap between morphologically related pairs was manipulated as part of a lexical decision task. Measures of morphological awareness were assessed using a specifically designed sentence completion task. Significant priming effects were found in each group, yet adults with dyslexia were found to benefit more from the morphological structure than the controls. Adults with dyslexia were found to be influenced by both form (morpho-orthographic) and meaning (morphosemantic) properties of morphemes while controls were mainly influenced by morphosemantic properties. The reports suggest that morphological processing is intact in high-functioning dyslexics and a strength when compared to controls matched for reading comprehension and age. Thus, reports support morphological processing as a potential factor in the reading compensation of adults with dyslexia. However, adults with dyslexia performed significantly worse than controls on morphological awareness measures.