The present study aimed to identify behavioral and neurophysiological correlates of dyslexia which could potentially predict reading difficulty. One hundred and three Chinese children with and without dyslexia (Grade 2 or 3, 7- to 11-year-old) completed both verbal and visual working memory (n-back) tasks with concurrent EEG recording. Data of 74 children with sufficient usable EEG data are reported here. Overall, the typically developing control group (N = 28) responded significantly faster and more accurately than the group with dyslexia (N = 46), in both types of tasks. Group differences were also found in EEG band power in the retention phase of the tasks. Moreover, forward stepwise logistic regression demonstrated that both behavioral and neurophysiological measures predicted reading difficulty uniquely. Dyslexia was associated with higher frontal midline theta activity and reduced upper-alpha power in the posterior region. This finding is discussed in relation to the neural efficiency hypothesis. Whether these behavioral and neurophysiological patterns can longitudinally predict later reading development among preliterate children requires further investigation. Copyright © 2022 The Author(s).