A study was conducted to shed light on the influence which children's developmental stage in learning to read and the reading instruction they receive have on first-graders' reading concepts. The study provided descriptive information to answer the following questions: (1) Do children from literature-based and skill-based instructional settings differ in their concepts of reading? (2) If the children do differ in their concepts of reading, to what extent and in what ways do they differ? Twenty-four white, first-grade children (average readers) participated in the study. The study utilized a range of instruments including structured interviews, Altered Passages, and Running Record Analysis. Findings indicated that both development in the stage of learning to read and type of instruction play a role in beginning readers' concepts. Similarities in the two groups indicated that the influence of development in learning to read cuts across instructional contexts. The results also indicated that these beginning readers attended to and successfully used graphophonic relationships in print whether or not their reading instruction focused on traditional, systematic teaching of phonic skills. Results revealed that metacognitive differences between the literature-based and skill-based students varied according to instruction--the breadth of metacognitive understanding was much greater for the literature-instructed students. Findings support the claim that instruction makes a difference in students' reading schemata. (One figure and four tables of data are included and 46 references are attached.) (MG)