This study examined the effectiveness of two computer programs designed to increase phonological awareness in young children. The programs, DaisyQuest and Daisy's Castle, provide instruction and practice in rhyme identification, phonological analysis (segmenting), and phonological synthesis (blending). Thirty‐six kindergarten and 36 first grade students, who demonstrated below grade level performance in reading, were randomly assigned to one of three experimental conditions, and participated in daily, 20 minute, small‐group training sessions, over a period of four weeks. Pre‐and posttests of rhyming, segmentation, phoneme isolation and blending were administered, and the effects of computer‐administered phonological awareness instruction were compared with teacher‐delivered phonological awareness instruction and an instructional technology control group. After five hours of instruction, children who received computer‐administered phonological awareness instruction and children who received teacher‐delivered phonological awareness instruction showed a significant increase in phonological processing over that of the instructional technology control group.