This paper deals with the relation between children's home literacy environments (HLE) and their literacy development in the first phase of primary school. On the basis of a broad conceptualisation of the HLE, we identified three home literacy profiles (rich, child-directed and poor HLE). Firstly, we related these profiles to socio-cultural factors (more specifically, ethnicity and socio-economic status [SES]). We found an association between the HLE and ethnicity/SES, indicating that (Dutch) majority children and children from high SES families had, in general, the most stimulating HLEs. On the other hand, we observed considerable variability in HLEs within ethnic minority and low SES groups. Subsequently, we related the HLE profiles to literacy outcomes in kindergarten, first and second grade. We found that, after controlling for relevant background characteristics, the HLE had an effect on children's vocabulary scores in first grade, and their general reading comprehension both in first and second grade.