The majority view of reading development maintains the importance of specific cognitive and linguistic abilities, e.g. phonological awareness (PA) and vocabulary and verbal working memory (VWM). Another factor in attaining literacy may be the language of exposure, e.g. whether it has a transparent or a deep orthography. This study examines the interaction between known predictors for literacy development and the orthography. It focuses on early levels of literacy (decoding and spelling) amongst children with typical language development. English-speaking (deep orthography) and Croatian-speaking (transparent orthography) kindergarteners were assessed on measures of vocabulary, PA, functions of verbal working memory, and early literacy skills at the beginning of the kindergarten year. The results indicate that a transparent orthography (Croatian) increases early decoding and encoding skills and they show expected correlations between PA, vocabulary, and early literacy abilities. English speakers did not show these correlations at the onset of the kindergarten year. It is postulated that the nature of the deep orthography requires some instructional time for English-speaking children before PA and vocabulary will show predictive validity for reading acquisition.