This study examined language and reading ability in English monolinguals, Spanish monolinguals, and two bilingual groups at the beginning of kindergarten and at the beginning of first grade. The study also compared the family background of the children on home literacy, parent education, and the parents' aspirations for their children. In addition, the children in the study were assessed for general cognitive ability. Results indicated that only the English and Spanish monolingual students differed in home background, with English monolinguals having higher levels of parental education and more traditional literacy activities in the home. In general, students did not differ in basic cognitive functioning or parental expectations. Bilingual children were better than their monolingual peers in both semantic functioning and communicative competence when tested in their dominant language. The research has implications for educational psychologists and classroom teachers. (Author/MSE)