As the reading process is inseparable from working memory, inhibition, and other higher cognitive processes, the deep cognitive processing defects that are associated with dyslexia may be due to defective distraction inhibition systems. In this study, we used event-related potential technology to explore the source of negative priming effects in children with developmental dyslexia and in a group of healthy children for comparison. We found that the changes in the average response times in the negative priming and control conditions were consistent across the two groups, while the negative priming effects differed significantly between the groups. The magnitude of the negative priming effect was significantly different between the two groups, with the magnitude being significantly higher in the control group than it was in the developmental dyslexia group. These results indicate that there are deficits in distraction inhibition in children with developmental dyslexia. In terms of the time course of processing, inhibition deficits in the dyslexia group appeared during early-stage cognition selection and lasted through the response selection phase. Regarding the cerebral cortex locations, early-stage cognition selection was mainly located in the parietal region, while late-stage response selection was mainly located in the frontal and central regions. The results of our study may help further our understanding of the intrinsic causes of developmental dyslexia.