A central feature of auditory STM is its item-limited processing capacity. We investigated whether auditory STM capacity correlated with regional gray and white matter in the structural MRI images from 74 healthy adults, 40 of whom had a prior diagnosis of developmental dyslexia whereas 34 had no history of any cognitive impairment. Using whole-brain statistics, we identified a region in the left posterior STS where gray matter density was positively correlated with forward digit span, backward digit span, and performance on a "spoonerisms" task that required both auditory STM and phoneme manipulation. Across tasks and participant groups, the correlation was highly significant even when variance related to reading and auditory nonword repetition was factored out. Although the dyslexics had poorer phonological skills, the effect of auditory STM capacity in the left STS was the same as in the cognitively normal group. We also illustrate that the anatomical location of this effect is in proximity to a lesion site recently associated with reduced auditory STM capacity in patients with stroke damage. This result, therefore, indicates that gray matter density in the posterior STS predicts auditory STM capacity in the healthy and damaged brain. In conclusion, we suggest that our present findings are consistent with the view that there is an overlap between the mechanisms that support language processing and auditory STM.