Children with Specific Language Impairment have difficulties understanding relative clauses, difficulties that have been ascribed to a deficit in phrasal movement. The current study explores the nature of this deficit in movement, and specifically whether it is related to a deficit in the construction of traces, or whether traces are constructed, and the deficit is related to a failure to transfer thematic roles via chains. This question was assessed using reading-aloud of noun-verb homographs that are incorporated in object relative sentences, and their correct reading critically hinges on the correct processing of the object relative sentence. We used a property of Hebrew orthography, the underrepresentation of vowels, that makes the reading of homographs dependent on the sentence. The rationale behind the study was that readers who cannot process or represent traces of movement, are expected to fail in identifying the syntactic role of such homographs when they are incorporated after the trace position in movement-derived sentences, and therefore fail to read them. Nine school-age Hebrew-speaking children with SLI, and nine participants without language impairment read aloud and paraphrased such sentences. The children with SLI read the homographs after the trace correctly but failed to interpret the object relative sentences. They interpreted well the sentences that were not derived by movement. The study indicates that traces of movement are created in SLI but the assignment of thematic roles via chains is impaired.