This study investigated three questions: Do phonological processes show cross-linguistic transfer? How does the language of instruction influence the relationship between phonological processes and decoding? Does performance on Spanish and English phonological processing tasks similarly predict English decoding for the same English learners (ELs)? We studied first-grade ELs who had been enrolled for 2 years in two programs that differed by language of instruction (English only and bilingual). Phonological processing skills were examined following a theory of core phonological processing deficits that postulates that three related constructs—phonological awareness, phonological coding, and phonological recoding—are the major components of phonological processing. The results indicate that (a) phonological processes do exhibit cross-linguistic transfer in young ELs; (b) phonological awareness might best be conceptualized as comprising two developmentally overlapping components; (c) language of instruction influences English and Spanish word reading and Spanish pseudoword decoding, but not English pseudoword decoding; and (d) phonological awareness is the only theoretical phonological processing construct significantly related to all English and Spanish reading tasks.