Extant research documents impaired language among children with prenatal cocaine exposure (PCE) relative to nondrug exposed (NDE) children, suggesting that cocaine alters development of neurobiological systems that support language. The current study examines behavioral and neural (electrophysiological) indices of language function in older adolescents. Specifically, we compare performance of PCE (N = 59) and NDE (N = 51) adolescents on a battery of cognitive and linguistic assessments that tap word reading, reading comprehension, semantic and grammatical processing, and IQ. In addition, we examine event related potential (ERP) responses in in a subset of these children across three experimental tasks that examine word level phonological processing (rhyme priming), word level semantic processing (semantic priming), and sentence level semantic processing (semantic anomaly). Findings reveal deficits across a number of reading and language assessments, after controlling for socioeconomic status and exposure to other substances. Additionally, ERP data reveal atypical orthography to phonology mapping (reduced N1/P2 response) and atypical rhyme and semantic processing (N400 response). These findings suggest that PCE continues to impact language and reading skills into the late teenage years.