This study was designed to investigate the effect of bilingualism and reading difficulties (RD) on episodic and semantic memory. The subjects included 190 children (aged 9–12 years): 45 Iranian-Swedish bilinguals and 59 Swedish monolinguals with typically developed reading, along with 41 bilinguals and 45 monolinguals with RD. To measure episodic memory, subject-performed and verbal tasks were used for encoding, and both free and cued recall were used for retrieval. Letter and category fluency tasks were used to test semantic memory. In action memory, bilingual children with RD benefited less from enactment encoding form compared to children with typically developed reading. Additionally, bilingual with RD had lower rates of recollection in category fluency compared to their monolingual counterparts. However, in letter fluency, there was not found a difference between performances of bilinguals and monolinguals with RD. We discuss the involvement of long-term memory in both bilingualism and reading.