Background Morphological awareness plays a crucial role in supporting higher‐level text processing. We examined its contribution to reading comprehension in children of different ages and ability levels in order to determine when and for whom morphological awareness is of particular importance. Methods Three groups of children (aged 6–8 years, N = 128; 9–11 years, N = 126; and 12–13 years N = 147) completed judgement and production tasks to measure awareness of compounding, inflections and derivations. Nonverbal reasoning, vocabulary, phonological awareness, word reading and reading comprehension were also assessed. Results Principal component analysis yielded a single primary factor of morphological awareness for each age group. Separate hierarchical multiple regressions revealed that this morphological awareness factor accounted for significant unique variance in reading comprehension for groups of 6–8 and 12–13 years, beyond age, nonverbal reasoning, vocabulary, phonological awareness and word reading. Vocabulary also uniquely predicted reading comprehension in all three age groups. Quantile regression analyses at three points in the reading comprehension distribution (0.1, 0.5 and 0.9) indicated that morphological awareness and vocabulary predicted reading comprehension to a similar extent across the ability range. Conclusions Our results clarify the fundamental role of morphological awareness in reading comprehension across all levels of readers. In addition, vocabulary and morphological awareness each make critical contributions to comprehension ability in developing readers across the ability range.