First, second, and third graders (N = 102) who had completed from 1 to 3 years of literacy instruction in other schools and had experienced failure entered a private school for struggling readers and received instruction in either of 2 types of systematic phonics programs over a 4-year period. One group received a keyword analogy method (KEY) that taught them to decode words by analogy to 120 keywords. The other group received KEY enriched with instruction in grapho-phonemic analysis (KEY-PLUS). Results showed that students receiving KEY-PLUS read and spelled words significantly better during the first 2 years of instruction than students receiving the KEY method. The same differences remained evident, although not significant, during Years 3 and 4. The programs did not differentially improve reading comprehension. Some effects of IQ were found. Results are consistent with developmental theories indicating the foundational importance of grapho-phonemic analysis for retaining written words in memory to facilitate word reading and spelling. (Contains 4 tables.)