Readers with developmental dyslexia are known to be impaired in representing and accessing phonology, but their ability to process meaning is generally considered to be intact. However, neurocognitive studies show evidence of a subtle semantic processing deficit in dyslexic readers, relative to their typically-developing peers. Here, we compared dyslexic and typical adult readers on their ability to judge semantic congruency (congruent vs. inconcongruent) in short, two-word phrases, which were further manipulated for phonological relatedness (alliterating vs. non-alliterating); “dazzling-diamond”; “sparkling-diamond”; “dangerous-diamond”; and “creepy-diamond”. At the level of behavioural judgement, all readers were less accurate when evaluating incongruent alliterating items compared with incongruent non-aliterating, suggesting that phonological patterning creates the illusion of semantic congruency (as per Egan et al., 2020). Dyslexic readers showed a similar propensity for this form-meaning relationship despite a phonological processing impairment as evidenced in the cognitive and literacy indicative assessments. Dyslexic readers also showed an overall reduction in the ability to accurately judge semantic congruency, suggestive of a subtle semantic impairment. Whilst no group differences emerged in the electrophysiological measures, our pupil dilation measurements revealed a global tendency for dyslexic readers to manifest a reduced attentional response to these word stimuli, compared with typical readers. Our results show a broad manifestation of neurocognitive differences in adult dyslexic and typical readers’ processing of print, at the level of autonomic arousal as well as in higher level semantic judgements.