This study examines the development of literacy and identity for young Indigenous Taiwanese children using ethnographic methods and the theories of multiple literacies, Indigenous knowledge, and identity construction, and it provides insights into the incorporation of Indigenous knowledge and literacies to create hybrid literacy spaces. Focused-upon participants included four 6-year-old Rukai-tribe children--two who lived in a city and two who lived in a village--and their families and teachers. We found that all children learned literacies in culturally meaningful contexts that involved stories and hybrid literacy practices, Indigenous foods, religious activities, traditional life skills, Indigenous language, and multiple forms of text. The two city children developed Rukai knowledge and literacies through performance-based contexts, whereas the village children learned through authentic contexts (e.g., observing farming and hunting). The literacy and identity of the two city children may be undermined due to limited access to Rukai resources, stemming from racism, classism, and linguicism.