This article reports on a longitudinal study of reading progress in a group of five-year-old deaf children and a group of hearing controls. All children were prereaders at the beginning of the study and the IQ of the two groups were matched. The deaf children varied considerably on a number of measures, including implicit phonological awareness, oral ability, and familiarity with British Sign Language and fingerspelling. Overall, the deaf children made significantly less reading progress than their hearing peers over the first year of schooling, and they also scored significantly lower on the test of rime and onset awareness. However, considerable variation in the reading progress of the deaf children was positively correlated with oral skills, rime/onset awareness, and language comprehension. Language comprehension, itself, was positively correlated with signing and fingerspelling. The deaf children were assessed again one year later, when learning to read continued to be very delayed, and the pattern of correlation was essentially the same. The implications of these findings for the education of deaf children are discussed.