Comprehensive models of derived polymorphemic word recognition skill in developing readers, with an emphasis on children with reading difficulty (RD), have not been developed. The purpose of the present study was to model individual differences in polymorphemic word recognition ability at the item level among 5th-grade children (N = 173) oversampled for children with RD using item-response crossed random-effects models. We distinguish between two subtypes of RD children with word recognition problems, those with early-emerging RD and late-emerging RD. An extensive set of predictors representing item-specific knowledge, child-level characteristics, and word-level characteristics were used to predict item-level variance in polymorphemic word recognition. Results indicate that item-specific root word recognition and word familiarity; child-level RD status, morphological awareness, and orthographic choice; word-level frequency and root word family size; and the interactions between morphological awareness and RD status and root word recognition and root transparency predicted individual differences in polymorphemic word recognition item performance. Results are interpreted within a multisource individual difference model of polymorphemic word recognition skill spanning item-specific, child-level, and word-level knowledge.