A study examined when young children begin processing phonetic cues for reading. Subjects were kindergartners selected and classified by their ability to read preprimer and primer level words on a 40-word list--prereaders (0-1 words known), novices (1-11 words known), and veterans (11-36 words known). Subjects were given reading practice with words with simplified phonetic spellings and with words that achieved visual distinctiveness although no letters corresponded to sounds. Children were told the spoken word corresponding to each spelling and were given several trials to learn the words, and then administered a posttest. Results indicated that novices and veterans learned to read the phonetic spellings more easily than the visual spellings, while results were the opposite for prereaders. Findings suggest that phonetic cue reading is possible at the outset when children first begin reading words out of context, and that visual cue reading characterizes how prereaders read words. Findings also suggest that learning to spell contributed to beginners' ability to read words, enabling children to process phonetic cues in the words. Since word reading and word spelling skills develop in stages, classroom instruction and practice in invented spelling promote learning to spell and read words. Allowing children to practice what they know about the English orthographic system by inventing spellings of words does not appear to inhibit development but rather to enhance progress in learning to spell and read. (Tables of data and figures are included and references are attached.) (NKA)