The rapid growth of Mandarin Chinese and English dual-language (DL) programs and the differences between these two languages have fostered the need to investigate the early literacy performance of young students in a Mandarin/English DL program. This study used the interactive transfer framework (Chung et al., 2019) to understand the Mandarin and English literacy development of first- and second-grade students in a dual immersion program, with a particular focus on the influence of Pinyin. The study analyzed 23 first- and second-grade DL students' English and Mandarin early literacy skills using an explanatory sequential mixed-methods design, in which quantitative analysis was applied in the first phase, followed by error analysis in the second phase. According to the quantitative analysis, students performed on or above average on English tests, and their Chinese Pinyin syllable learning was at the grade level. However, their Chinese phonological awareness and language proficiency were still under the grade-level average. The students' home languages played a vital role in their language development, especially in their Chinese literacy development. In the error analysis, two Spanish students pronounced /a/, /i/, and /u/ sounds in Pinyin when they were tested in English. It should be noted that the vowel sounds in Pinyin are very similar to sounds in Spanish. These results show that language transfer is more likely to happen between languages that share more similarities (close distance). The Pinyin letter "c" (/tz/) emerged as the most difficult sound across all home language groups due to its uncommon pronunciation in Spanish and English. This shows that when there is a lack of similarity between languages, learning an entirely new sound becomes harder. The findings provide a better understanding of the early biliteracy performance of young bilingual learners in a Mandarin-English two-way immersion DL program after Pinyin learning, and also provide evidence of the cross-linguistic influence between Mandarin Pinyin and English literacy. [The dissertation citations contained here are published with the permission of ProQuest LLC. Further reproduction is prohibited without permission. Copies of dissertations may be obtained by Telephone (800) 1-800-521-0600. Web page: http://www.proquest.com.bibliotheek.ehb.be/en-US/products/dissertations/individuals.shtml.]