Background: While previous studies have shown that children affected by dyslexia exhibit a deficit in categorical perception of segmental features in alphabetic languages, it remains unclear whether the categorical perception deficit generalizes to nonalphabetic languages at the suprasegmental level. In this study, we investigated the occurrence of categorical perception deficit in Mandarin lexical tones in Chinese children with dyslexia. Methods: Both behavioral and electrophysiological measures were taken to compare Chinese dyslexic children with age-matched controls. Auditory event-related potentials were collected with a passive listening oddball paradigm. Results: Behavioral data showed that dyslexic children perceived lexical tone contrasts less categorically and less precisely than age-matched controls. Consistent with the behavioral data, the across-category tone contrast elicited larger mismatch negativity than the within-category distinction in the left hemisphere for the age-matched controls but not for the dyslexic children. Conclusion: The behavioral and electrophysiological results demonstrate impaired categorical perception of lexical tones in Chinese children with dyslexia. Our findings support the hypothesis that children affected by dyslexia have a general deficit in categorical perception of speech, which generalizes to nonalphabetic languages at the suprasegmental level.