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We examined the components of first (L1) and second language (L2) phonological processing that are related to L2 word reading and vocabulary. Spanish–speaking English learners (EL) were classified as average or low readers in grades 1 and 2. A large number of children who started out as poor readers in first grade became average readers in second grade while vocabulary scores were more stable. Binary logistic regressions examined variables related to classifications of consistently average, consistently low, or improving on reading or vocabulary across grades. Good L2 phonological short–term memory and phonological awareness scores predicted good reading and vocabulary scores. L1 and L2 measures differentiated consistently good performers from consistently low performers, while only L2 measures differentiated children who improved from children who remained low performers. Children who …