This study explores the theoretical proposal that developmental dyslexia involves a failure to develop perceptual expertise with words despite adequate education. Among a group of Hong Kong Chinese children diagnosed with developmental dyslexia, we investigated the relationship between Chinese word reading and perceptual expertise with Chinese characters. In a perceptual fluency task, the time of visual exposure to Chinese characters was manipulated and limited such that the speed of discrimination of a short sequence of Chinese characters at an accuracy level of 80% was estimated. Pair-wise correlations showed that perceptual fluency for characters predicted speeded and non-speeded word reading performance. Exploratory hierarchical regressions showed that perceptual fluency for characters accounted for 5.3% and 9.6% variance in speeded and non-speeded reading respectively, in addition to age, non-verbal IQ, phonological awareness, morphological awareness, rapid automatized naming (RAN) and perceptual fluency for digits. The findings suggest that perceptual expertise with words plays an important role in Chinese reading performance in developmental dyslexia, and that perceptual training is a potential remediation direction.