We investigated whether phonological awareness mediated the relationship between speechreading and reading comprehension in Chinese adults with hearing impairment (HI) and normal hearing (NH). Speechreading, phonological awareness, and reading comprehension tests were administered to 154 young adults with HI and 97 young adults with NH in China. Results revealed significant correlations between speechreading, phonological awareness, and reading comprehension in adults with HI, but not those with NH. Phonological awareness did not mediate the relationship between speechreading and reading comprehension in either group of participants. These results suggest that visual speech information (speechreading) contributes to the development of phonological representations in adults with HI, which in turn supports reading comprehension. This relationship was not observed in the adults with NH. Teachers and clinicians working with HI students need to have an understanding of this difference, and take into account the developmental nature of the relationship between speechreadaing, phonological awareness and reading comprehension in the HI students for differentiated reading intervention. If attention to the visual speech information via speechreading indeed contributes to better phonological awareness, HI students may benefit from other visual methods to develop component skills that are foundational to reading success.