Purpose: The aim of this study was to gain more insight into the linguistic characterization of dyslexia by investigating vocabulary acquisition. In a previous study, vocabulary at 17 months of age appeared to be related to familial risk (FR) of dyslexia. The aim of this study was to investigate how the differences in lexical composition further develop up to 3 years (35 months) of age and, more importantly, to what extent these differences can be considered specific precursors of dyslexia later on. Method: In a total number of 262 children from the Dutch Dyslexia Program, 169 with and 93 without FR for dyslexia, productive vocabulary was assessed with the Dutch version of the MacArthur Communicative Development Inventories at ages 17, 23, 29, and 35 months. Reading tests were administered in Grades 2 and 3, resulting in dyslexia diagnosis in 60 FR children (FR-dys), leaving 109 FR children who developed normal reading skills (FR-nondys) and 93 control children. Children's expressive vocabulary was scored according to the total number of words produced and according to the different major linguistic word categories: nouns, predicates, and closed-class words. The analyses comprised a comparison of total productive vocabulary and the number of words per grammatical category at four different ages for the three groups (FR-dys, FR-nondys, and control). Also, correlations were calculated between vocabulary scores and reading scores. Results: Up to 29 months of age, the total numbers of nouns, predicates, and closed-class words are significantly lower for the FR-dys group as compared with the FR-nondys and control groups; for closed-class words at 23 and 35 months of age, the FR-nondys group's mean values are in between the mean of the FR-dys and control groups. Weak correlations were found between total vocabulary size, number of verbs, number and proportion of predicates at 23 months of age, and word and pseudoword reading fluency in Grades 2 and 3. Conclusions: These results indicate that development of vocabulary is a significant though weak predictor of reading fluency and dyslexia; vocabulary size and proportion of verbs at 23 months of age, as well as proportion of closed-class words up to 35 months of age, seem to be the most sensitive indicators of delayed vocabulary development and later reading difficulties. There is no indication that FR for dyslexia by itself is related to vocabulary development.