Identification of specific neurophysiological dysfunctions resulting in selective reading difficulty (dyslexia) has remained elusive. In addition to impaired reading development, individuals with dyslexia frequently exhibit behavioral deficits in perceptual adaptation. Here, we assessed neurophysiological adaptation to stimulus repetition in adults and children with dyslexia for a wide variety of stimuli – spoken words, written words, visual objects, and faces. For every stimulus type, individuals with dyslexia exhibited significantly diminished neural adaptation compared to controls in stimulus-specific cortical areas. Better reading skills in adults and children with dyslexia were associated with greater repetition-induced neural adaptation. These results highlight a dysfunction of rapid neural adaptation as a core neurophysiological difference in dyslexia that may underlie impaired reading development. Reduced neurophysiological adaptation may relate to prior reports of reduced behavioral adaptation in dyslexia, and may reveal a difference in brain functions that ultimately results in a specific reading impairment.