Reading disability in children with dyslexia has been proposed to reflect impairment in auditory timing perception. We investigated one aspect of timing perception--"temporal grouping"--as present in prosodic phrase boundaries of natural speech, in age-matched groups of children, ages 6-8 years, with and without dyslexia. Prosodic phrase boundaries are characterized by temporal grouping of functionally related speech elements and can facilitate syntactic processing of speech. For example, temporary syntactic ambiguities, such as early-closure structures, are processed faster when prosodic phrase boundaries are present. We examined children's prosodic facilitation by measuring their efficiency of sentence processing for temporary syntactic ambiguities spoken with (facilitating) versus without (neutral) prosodic phrase boundaries. Both groups of children benefited similarly from prosodic facilitation, displaying faster reaction times in facilitating compared to neutral prosody. These findings indicate that the use of prosodic phrase boundaries for speech processing is not impaired in children with dyslexia.