Purpose: Atypical temporal processing is thought to be involved in the phonological difficulties that characterize children with developmental dyslexia (DYS). The temporal sampling (TS) theory of dyslexia posits that the processing of low-frequency envelope modulations is impaired, but the processing of binaural temporal fine structure (TFS) is preserved in children with DYS. Method: Binaural TFS sensitivity was assessed for children with DYS utilizing the methods developed by Flanagan et al. for typically developing (TD) children. New results for 58 children with DYS (ages 7-9.6 years) were compared with those for 30 age-matched controls (chronological age-matched [CA]) reported in Flanagan et al. Threshold frequency, that is, the highest frequency at which an interaural phase difference (IPD) of 30° or 180° could be distinguished from an IPD of 0° was determined using a two-interval forced-choice task in which the frequency was adaptively varied, with stimuli presented via headphones. Results: For those who were able to perform the task above chance, the median TFS[subscript 180] thresholds were: DYS = 886 Hz; CA = 999Hz. For TFS[subscript 30] thresholds: DYS = 388 Hz; CA = 442 Hz. A linear mixed-effects model with dependent variable threshold frequency and fixed effects of group (CA and DYS) and phase (180° and 30°) showed no significant difference between groups (p > 0.05) and no significant interaction between group and phase. Both groups performed more poorly than young typically hearing adults (p < 0.001) for both phases. Conclusions: Binaural TFS sensitivity does not differ significantly for children with DYS and TD children. For both groups, the development of binaural TFS sensitivity is protracted. The results are consistent with TS theory.