Background:The relationships between auditory processing and reading-related skills remain poorly understood despite intensive research. Here we focus on the potential role of musical experience as a confounding factor. Specifically we ask whether the pattern of correlations between auditory and reading related skills differ between children with different amounts of musical experience.Methodology/Principal Findings:Third grade children with various degrees of musical experience were tested on a battery of auditory processing and reading related tasks. Very poor auditory thresholds and poor memory skills were abundant only among children with no musical education. In this population, indices of auditory processing (frequency and interval discrimination thresholds) were significantly correlated with and accounted for up to 13% of the variance in reading related skills. Among children with more than one year of musical training, auditory processing indices were better, yet reading related skills were not correlated with them. A potential interpretation for the reduction in the correlations might be that auditory and reading-related skills improve at different rates as a function of musical training.Conclusions/Significance:Participants' previous musical training, which is typically ignored in studies assessing the relations between auditory and reading related skills, should be considered. Very poor auditory and memory skills are rare among children with even a short period of musical training, suggesting musical training could have an impact on both. The lack of correlation in the musically trained population suggests that a short period of musical training does not enhance reading related skills of individuals with within-normal auditory processing skills. Further studies are required to determine whether the associations between musical training, auditory processing and memory are indeed causal or whether children with poor auditory and memory skills are less likely to study music and if so, why this is the case.