In the current study, two experiments were carried out: the first tested the development of derivational root and word-pattern morphological awareness in Arabic; the second tested morphological processing in Arabic spelling. 143 Arabic native speaking children with normal reading skills in 2nd, 4th and 6th grade participated in the study. The results of the first experiment demonstrated the early emergence of derivational morphological awareness in children, with root awareness emerging earlier than word-pattern awareness. The second experiment supported the implication of morphological processing in spelling words and pseudo words across all grades tested. The results are discussed within a developmental psycholinguistic framework with particular emphasis on the characteristics of the Arabic language and orthography.