Research on second-language (L2) English literacy development in Chinese children with dyslexia is limited, but existing studies suggest a puzzling phenomenon: These children experience difficulties in reading both native (L1) Chinese and L2 English, despite the distinct cognitive processes involved in reading Chinese and English which suggest minimal transfer between the two writing systems. This paper aims to investigate the above phenomenon and examine the role of phonics skills in improving English word reading in dyslexic Chinese children in 2 studies. Study 1 found that letter-sound-decoding knowledge robustly and significantly predicted English word naming and reading fluency in Chinese dyslexic children. Study 2 revealed that phonics-based interventions is required to significantly improve English literacy skills. The accommodation-assimilation hypothesis explains cross-language transfer of reading difficulties in Chinese-English bilinguals: Dyslexic Chinese children assimilate English word-decoding processes using their native language; they can accommodate and improve English literacy by learning letter-sound decoding skills.