Arabic is characterized by diglossia, which involves the use of two language varieties within a single speech community: Spoken Arabic (SpA) for everyday speech and Modern Standard Arabic (MSA) for formal speech and reading/writing. Earlier research suggests that some Arabic-speaking children with Autism spectrum disorder (ASD) might favor MSA over SpA in informal settings, unlike those with Typical Language Development (TLD). Research on typical and atypical lexical abilities within the diglossic context of Arabic is limited. This study investigated the manifestation of diglossia in the lexical skills of Palestinian-Arabic speaking children with and without ASD. A total of 57 Palestinian-Arabic speaking children aged 4-11 were evaluated, comprising three groups: TLD, ASD with language Impairment (LI) (ASD+LI), and ASD with normal language skills (ASD+NL). Two vocabulary tasks were used: comprehension and production of nouns and verbs that manipulated the lexico-phonological distance between SpA and MSA. Moreover, a LITMUS-MAIN narrative production task in SpA was administered to all children. The vocabulary comprehension and production tasks were coded for accuracy of response. The production tasks (vocabulary and narrative) were also coded using a special coding rubric according to which all words used were categorized as either SpA or MSA. No differences emerged between the TLD and ASD+NL groups in any vocabulary measure, yet lower scores were observed in the ASD+LI group. In production tasks, all groups utilized SpA more than MSA. Nonetheless, some children with ASD overused MSA lexis. These findings highlight the heterogeneity of lexical skills among children with ASD. The results further underscore the role of diglossia in Arabic in lexical abilities in autism, and thus call for thorough language assessment procedures across different domains.