One of the predominant theories to explain reading problems is that children who are dyslexic (poor readers) have immature magnocellular pathways. If magnocellular pathways control reading, then tuning up the magnocellular pathways should improve reading fluency. Since left-right movement discrimination of sinewave gratings, relative to a sinewave background provides the optimal stimulus for magnocellular pathways at both low and high levels of processing, we used this paradigm to investigate perceptual learning in children who are learning to read. Contrast Sensitivity Functions (CSFs) for left-right movement discrimination using a 2 AFC task were determined for thirty-five children in a public elementary school, 5 normal readers in grades K-3, and 5 dyslexic readers (determined using The Dyslexia Screener) in grades 1-3. Test spatial frequencies of 0.25, 0.5, 1, and 2 cyc/deg surrounded by one of a 4-octave range of backgrounds were used to test the effects of adjacent background frequencies on left-right movement and figure/ground discrimination. Following one practice session, figure/ground and left-right discrimination were easiest for normal readers when test and background spatial frequencies were equal, and most difficult for dyslexic readers. The direction discrimination CSFs of dyslexic readers ressembled the CSFs of children in Kindergarten. Normal readers were 3-6 times more sensitive than dyslexic readers to the direction vertical sinewave gratings moved, this difference being highly significant ([F(3,1) = 37.93, p<0.0000007]), when analyzed using a 2 factors ANOVA (4 test frequencies x 2 readers types) in a repeated measures design (5 different backgrounds). Moreover, a developmental trend, p<0.0027, in the direction discrimination CSF was found only for normal readers. Children who are normal readers transitioned, so that left-right and figure/ground discrimination were easiest when the same spatial frequency channel was activated by test and background frequencies, whereas dyslexic readers had great difficulty with this task. This study shows that not only is figure/ground discrimination required for learning to read, but left-right movement discrimination is also a key component required for reading. This study provides more evidence that magnocellular pathways provide the physiological substrate that controls reading.