The relation between nonword repetition and vocabulary has been the focus of a theoretical controversy for several decades. The point of contention is whether the ability underlying nonword repetition drives vocabulary growth or vice versa. The present study examines longitudinal interrelations between nonword repetition and vocabulary from age 3 to 5 with random intercept cross-lagged panel models (RI-CLPMs). RI-CLPMs have the advantage of separating within-child dynamic processes from more stable differences between children, including time-stable unmeasured confounders. For n = 260 monolingual German-speaking children assessed at three time points with a lag of eleven months, RI-CLPM and, for comparison purposes, "classical" cross-lagged panel models (CLPMs) were estimated. The ill-fitting CLPMs in which cross-lagged effects combine within-child processes and stable differences between children yielded evidence consistent with reciprocal effects between nonword repetition and vocabulary (without covariates) or from nonword repetition to vocabulary (with covariates). Adding a random intercept markedly improved model fit. All within-child cross-lagged effects in the RI-CLPM were nonsignificant. Thus, the results provided no evidence consistent with within-child processes such as nonword repetition affecting vocabulary or vice versa for preschool-age children. Instead, results are more consistent with, for example, third variable explanations, within-child processes fading out by age 3 or occurring on a time frame that is not captured with a lag of approximately 1 year.