The present study aims to explore the reciprocal relationship between multidimensional lexical knowledge (reading vocabulary and morphological awareness) and reading comprehension among early elementary-age Chinese students. Using data from second-grade students (N = 288, M[subscript age]=7.8), the study drew upon a cross-lagged panel design to test the bidirectionality of the two constructs. Results showed lexical knowledge, indicated by reading vocabulary and morphological awareness, had a significant effect on the development of reading comprehension skill among young Chinese readers. However, the relationship was unidirectional in nature based on the cross-lagged paths. Implications of this study centered on the conceptualization and operationalization of lexical knowledge, the uniqueness of morphological awareness as a component of lexical knowledge, and variations in instructional practices.