Two hundred and four 5- and 6-year-olds who were monolingual English-, bilingual English-Chinese-, or Chinese-speaking children beginning to learn English (2nd-language learners) were compared on phonological awareness and word decoding tasks in English and Chinese. Phonological awareness developed in response to language exposure and instruction but, once established, transferred across languages for both bilinguals and 2nd-language learners. In contrast, decoding ability developed separately for each language as a function of proficiency and instruction in that language and did not transfer to the other language. Therefore, there was no overall effect of bilingualism on learning to read: Performance depended on the structure of the language, proficiency in that language, and instructional experiences with that writing system. These results point to the importance of evaluating the features of the languages and instructional context in which children become biliterate.