The purpose of this study was to examine the level of basic literacy skills among elementary school students in residential child care institution based on their reading development. A total of 118 students participated in the reading screening test. According to the results of the screening test, students with severe reading difficulties were classified as ‘at risk’, students with reading difficulties were classified as ‘some risk’, and students with average and above average reading levels were classified as ‘typical’. The ‘at risk’ students were administered the Korean language acquisition and word recognition tests, while students in the ‘some risk’, and ‘typical’, were administered the reading fluency and comprehension tests. The main research findings are as follows. First, elementary school students in residential child care institution generally showed low levels of basic literacy skills. Second, almost students in the ‘at risk’ group were found to have difficulty in word recognition. Third, students in the ‘some risk’ and ‘typical’ groups were found to have greater difficulty in reading comprehension than reading fluency. Based on these research results, implications for enhancing basic literacy skills of elementary school students in residential child care institution were proposed.