This event-related potential (ERP) study aimed to examine at which point in the stream of four cognitive processes of word reading impairment occurs in dyslexic adults. Fourteen French native dyslexic speakers and eighteen matched controls performed a delayed phonological lexical decision task that consisted in deciding whether visual stimuli sounded like French words. Three hundred stimuli equally distributed among five experimental conditions (60 concrete French words, 60 pseudo-homophones, 60 pseudowords, 60 consonant and 60 symbol strings) were presented. Critically, two language processes involving phonological information, namely grapheme-to-phoneme conversion (N320) and memory retrieval of phonological information (Late Positive Complex) were impaired in dyslexics compared to controls. Moreover, lexical access (N400) was significantly modulated by six predictive variables assumed to be reliable markers of dyslexia. In contrast, and unexpectedly, the early processes of visual expertise for print (N170) appeared to operate in the same way in the two groups of participants. The locus of dyslexia is probably to be found primarily in some aspects of phonological processing during word reading. These findings support a clinical neurophysiology model postulating that at least two phonological processes during reading might be impaired in dyslexics, namely grapheme-tophoneme conversion, and memory retrieval of phonological information.