The present study used a variant of masked priming to track the development of 2 marker effects of orthographic and phonological processing from Grade 1 through Grade 5 in a cross-sectional study. Pseudohomophone (PsH) priming served as a marker for phonological processing, whereas transposed-letter (TL) priming was a marker for coarse-grained orthographic processing. The results revealed a clear developmental picture. First, the PsH priming effect was significant and remained stable across development, suggesting that phonology not only plays an important role in early reading development but continues to exert a robust influence throughout reading development. This finding challenges the view that more advanced readers should rely less on phonological information than younger readers. Second, the TL priming effect increased monotonically with grade level and reading age, which suggests greater reliance on coarse-grained orthographic coding as children become better readers. Thus, TL priming effects seem to be a good marker effect for children's ability to use coarse-grained orthographic coding to speed up direct lexical access in alphabetic languages. The results were predicted by the dual-route model of orthographic processing, which suggests that direct orthographic access is achieved through coarse-grained orthographic coding that tolerates some degree of flexibility in letter order.