Word boundary information is not marked explicitly in Chinese sentences and word ambiguity happens in Chinese texts. This introduces difficulty to parse characters into words when reading Chinese sentences, especially for beginning readers. In an eye-tracking study, we tested whether explicit word boundary information as provided by alternating text-colors affects reading performance of Chinese children and how such an effect is influenced by individual differences in word segmentation ability. Results showed that across a number of eye-movement measures, grade three children overall benefited from explicit marking of word boundary. Additionally, children with highest word segmentation ability showed the largest benefits in reading speed. We discuss possible implications for education.