Within a dimensional view of reading disorders, it is important to understand the role of environmental factors in determining individual differences in literacy outcome. In the present study, we compared a group of 40 parents of children with dyslexia (PDys) with a group of 40 parents of typically developing children. The two parent groups did not differ in socioeconomic status or nonverbal IQ. Participants were assessed on cognitive (IQ, digit span) and literacy (reading fluency and accuracy) tasks, phonological awareness and verbal fluency measures. Questionnaires addressed reading history, parental distress, family functioning, anxiety and depression. The PDys group performed worse in all literacy measures and more frequently reported a history of poor reading; they also showed more parental distress. There were no differences between the two groups in depression or family functioning and no differences between mothers and fathers. Findings indicate that PDys show a cognitive profile consistent with the broader phenotype of dyslexia (i.e. reading impairment and poor phonological awareness), whereas, considering the emotional profile, the impact of dyslexia on the family system is limited to parental distress associated with the perception of having a child with specific needs. Copyright © 2013 John Wiley & Sons, Ltd. Practitioner Points Parents of children with dyslexia may themselves have reading problems and hence difficulty in supporting their children's school work. Practitioners may consider reading history (as measured by the Adult Reading History Questionnaire) as a first screening tool to identify possible reading difficulties in parents. Practitioners should help parents of children with dyslexia to manage their emotional reactions to having a child with difficulties. Family functioning does not differ within families with and without dyslexia. Being the parent of a child with dyslexia is not a significant risk factor for a mental health disorder (e.g. anxiety/depression).