Theoretical work has suggested close associations between morphological awareness (MA) and reading skills in Chinese; however, the nature and direction of these time-ordered links are little known. This study examined the interplays of MA and reading skills using a continuous-time modeling approach to three waves of two-year longitudinal data from first- (N = 149; 69 girls) and third-grade (N = 142; 74 girls) Chinese children. Results showed that (a) increases in MA predicted subsequent increases in reading skills (i.e., word-reading accuracy, word-reading fluency, and sentence-reading comprehension) and vice versa, (b) age only moderated the predictive effect of MA on sentence-reading comprehension, and (c) the magnitude of these effects was time-sensitive. The theoretical and educational implications of these findings are discussed.