This study investigated the comprehension of relative clauses (RCs) in Chinese children with and without developmental dyslexia (DD). Twenty-two children with DD, 22 chronological age-matched (CA) children, and 22 younger reading-level-matched (RL) children completed an RC comprehension task (measuring both accuracy and response latency), a receptive vocabulary task, and a working memory task. Results show that all three groups comprehended subject RCs more accurately than object RCs, supporting featural Relativized Minimality’s prediction that structural intervention (i.e., syntactic configurations where an intervening element blocks dependency formation) is a crucial factor in children’s RC comprehension. The DD group performed less accurately and more slowly on both structures compared to the CA group, but performed similarly to the RL group. Dyslexic children’s receptive vocabulary knowledge was associated with higher accuracy and shorter response latencies in RC comprehension, and their phonological short-term memory was specifically linked to faster RC processing. These findings confirm the existence of syntactic difficulties in dyslexia and suggest that these difficulties may stem from limited vocabulary knowledge and phonological short-term memory deficits.