This comparative study examines relationships between phonemic awareness and Spanish reading skill acquisition among three groups of Spanish-speaking first and second graders: children in Mexico receiving reading instruction in Spanish and children in the United States receiving reading instruction in either Spanish or English. Children were tested on Spanish oral language and reading skills in fall and spring of Grades 1 and 2. Children in Mexico were the lowest in phonemic awareness among the three groups and very low in their entering first-grade reading skills. However, they ended second grade matching or surpassing the reading skills of the U.S. students while remaining lower in phonemic awareness. Findings cast doubt on whether phonemic awareness instruction is helpful for children learning to read in Spanish.