The goal of this study was to investigate how growth during a phonics‐based intervention, as well as reading levels at baseline testing, predicted long‐term reading outcomes of children with dyslexia. Eighty Dutch children with dyslexia who had completed a 50‐week phonics‐based intervention in grade 4 were tested in grade 5 on both word and pseudoword (following regular Dutch orthographic patterns) reading efficiency and compared to 93 typical readers. In grade 5 the children with dyslexia were still significantly slower in word and pseudoword reading than their typically developing peers. Results showed that long‐term pseudoword reading in the group with dyslexia was predicted by pseudoword reading at pretest and growth in pseudoword reading during the intervention, which was itself predicted by pseudoword reading at pretest. This was not the case for word reading. We found that long‐term word reading was directly predicted from pretest word reading, and indirectly via pretest pseudoword reading, via growth in pseudoword and word reading. It can be concluded that pseudoword reading is not only a good indicator of severity of reading difficulties in children with dyslexia, it is also an indicator of who will profit from intervention in the long‐term.