This study investigated the role of cognitive and language skills as predictors of early literacy skills in children with Specific Language Impairment. A range of cognitive and linguistic skills were assessed in a sample of 137 eight-year-old children with SLI at the beginning of the school year, and 6 months later on word decoding and reading comprehension. The cognitive and linguistic measures revealed four factors that were called "language," "speech," "short-term memory," and "phonological awareness." Structural equation modeling showed word decoding to be predicted by speech, short-term memory, and phonological awareness, whereas reading comprehension was predicted by word decoding skills and short-term memory. It can be concluded that in children with SLI variations in early word decoding are mostly determined by speech abilities and short-term memory, and to a lesser extent by phonological awareness. Moreover, reading comprehension turns out to be highly dependent on word decoding and short-term memory. (Contains 1 figure and 5 tables.)