The researchers addressed two questions: (1) Does maternal reading mediation and family home literacy environment (HLE) relate to children's emergent literacy (EL) level? and (2) Do the relationships among these variables differ as a function of socioeconomic strata (SES) level. A total of 94 5-6-year-old children, 47 from low SES (LSES) and 47 from high (HSES) families, and their mothers participated. Mother-child interactions while reading an unfamiliar book were videotaped and their verbal expressions were coded for extracting maternal mediation level. Children's independent EL level was assessed prior to the interaction. Compared with the LSES group, HSES children showed higher EL levels and their homes had a richer literacy environment. Maternal mediation level differed by SES: LSES mothers paraphrased text more often; HSES mothers' higher mediation level included a discussion of the written system and making connections beyond the text. In the HSES group, maternal mediation level and HLE related to children's EL; no such relationships appeared in the LSES group. Results are discussed in terms of children's socio-economic background and their reading experiences. Implications for researchers and educational practices about the relationships between children's literacy development, SES, HLE, and parental mediation are discussed. (Contains 9 tables.)