This study tested the hypothesis that Distar Reading's demonstrated effects with disadvantaged children can be generalized to children with disabilities. The study compared the effects of two synthetic phonics reading programs, Direct Instruction "Reading Mastery" (which incorporated features of Distar Reading) and Addison Wesley's "Superkids." The two methods differed considerably in principles of instructional design and exemplified many of the unresolved conflicts in the phonics debate. The two methods were tested in a year-long intervention for 81 children who entered transitional kindergarten special education classes over a 4-year period. No significant achievement differences were evident for either instructional program, either at the end of the treatment year or at follow-up testing 1 year later. However, analysis focusing on children who progressed further in the two reading programs revealed that the Direct Instruction group registered larger reading gains. (Contains 37 references.) (JDD)