Digit comparison is strongly related to individual differences in children's arithmetic ability. Why this is the case, however, remains unclear to date. Therefore, we investigated the relative contribution of three possible cognitive mechanisms in first and second graders' digit comparison performance: digit identification, digit--number word matching and digit ordering ability. Furthermore, we examined whether these components could account for the well-established relation between digit comparison performance and arithmetic. As expected, all candidate predictors were related to digit comparison in both age groups. Moreover, in first graders, digit ordering and in second graders both digit identification and digit ordering explained unique variance in digit comparison performance. However, when entering these unique predictors of digit comparison into a mediation model with digit comparison as predictor and arithmetic as outcome, we observed that whereas in second graders digit ordering was a full mediator, in first graders this was not the case. For them, the reverse was true and digit comparison fully mediated the relation between digit ordering and arithmetic. These results suggest that between first and second grade, there is a shift in the predictive value for arithmetic from cardinal processing and procedural knowledge to ordinal processing and retrieving declarative knowledge from memory; a process which is possibly due to a change in arithmetic strategies at that age. A video abstract of this article can be viewed at: https://youtu.be/dDB0IGi2Hf8