Previous research shows that children with Rolandic Epilepsy have deficits of auditory processing. We wanted to confirm the nature of this deficit and whether it aggregates in families. We compared 40 children with Rolandic Epilepsy and 32 unaffected siblings with 99 typically developing children and 71 parents of RE children with 31 healthy adults on a battery of auditory processing tests. We also examined ear advantage in children with RE, their siblings and parents using population norms and measured non-word reading performance. We found a specific deficit for competing words in patients, their siblings and their parents, suggesting that this particular impairment of auditory processing present in children with RE, is heritable and likely to be persistent. Importantly, scores on this subtest in patients and siblings were significantly correlated with non-word reading performance. We saw increased rates of atypical left ear advantage in patients and siblings but no evidence of this in parents. We present these findings as evidence of familial incidence of dichotic listening and ear advantage abnormalities in relatives of children with Rolandic Epilepsy.