This report summarizes some of the results of studies in our laboratory exploring the development of cognitive, reading and prosodic skills in children with cochlear implantation (CI). The children with CI performed at significantly lower levels than the hearing comparison group on the majority of cognitive tests, despite showing levels of nonverbal ability. The differences between children with CI and hearing children were most pronounced on tasks with relatively high phonological processing demands, but they were not limited to phonological processing. Impairment of receptive and productive prosody was also evident in children with CI. Despite these difficulties, 75% of the children with CI reached a level of reading skill comparable to that of hearing children. The results are discussed with respect to compensation strategies in reading.