The contribution of morphological awareness to reading comprehension in Hebrew was studied in 298 second grade students who practiced two types of inflections, plural and possessive. Reading tasks at the beginning and end of the school year indicated that all improved on all tests in that period. Orthographic word recognition and morphological awareness predicted reading comprehension at the end of year. Students with low (LPD) and high (HPD) phonological decoding skills clearly differed qualitatively in reading comprehension. In the HPD students it was predicted by awareness of possessive inflections; in the LPD students it was predicted by orthographic word recognition ability. The results highlight the importance of examining the different components of morphological awareness in readers with different levels of phonological decoding ability.