The role of children's receptive vocabulary knowledge in word and nonword reading (decoding) in an orthographically transparent language is debated. Moreover, we have little understanding of how the role of vocabulary might differ between monolingual children and bilingual children from immigrant families (or language minority bilingual children (LMBC)) at different stages of reading development. This study examined the relation of receptive vocabulary to word and nonword reading accuracy and speed in 140 monolingual and bilingual students attending Grades 1, 3, or 5 in Italy. Both receptive vocabulary and reading performance were assessed using standardized tests in Italian. Regression models showed that for monolingual Italian children receptive vocabulary was related to word reading accuracy and speed in Grade 1 and word reading accuracy in Grade 5. In the LMBC group, receptive vocabulary was related to word and nonword reading accuracy and speed in Grade 1, to word reading accuracy in Grade 3, and to word reading speed in Grade 5. These findings suggest that vocabulary knowledge supports reading even in the earlier stages of reading development in a language with transparent orthography and underscore the importance of strengthening and assessing LMBC's receptive vocabulary for the adequate development of their reading skills.