Gender differences in reading development are a global phenomenon, with girls typically performing better than boys. Some studies have reported gender differences favouring girls in reading comprehension in South Africa, but little systematic evidence exists about gender differences in the cognitive-linguistic abilities that underlie reading development. This study investigated the effect of gender on phonological processing and reading development in Northern Sotho-English bilingual children. Grade 3 learners who received their literacy instruction in English were tested on various phonological processing and reading measures. Phonological awareness was assessed using phoneme isolation and elision tasks. Phonological working memory was assessed using memory for digits and non-word repetition tests while rapid automatised naming was tested using rapid letter, rapid digit, rapid object and rapid colour naming tasks. Reading achievement was assessed with various word reading tasks and with a fluent reading task. A multivariate analysis of variance revealed that gender had a significant effect on the phonological processing and reading abilities of Northern Sotho-English bilingual children. Girls performed significantly better than boys on all the reading measures, as well as on some aspects of phonological processing. The findings provide behavioural evidence in support of biological theories of gender differences, in that girls seemed to have developed some of the cognitive-linguistic skills associated with reading before boys. The girls also coped better with tasks that required increased cognitive processing. This study suggests that sex differences in reading development cannot be ignored in South Africa and need to be addressed in future curriculum development.