Reading acquisition is based on a set of preliteracy skills that lay the foundation for future reading abilities. Phonological awareness--the ability to identify and manipulate the sound units of oral language--has been reported to play a central role in reading acquisition. However, current evidence is mixed with respect to its universal contribution to reading acquisition across orthographies. This longitudinal study examines the development and contribution of phonological awareness to early reading skills in Spanish, a transparent orthography. The results of a comprehensive battery of phonological awareness skills in a large sample of children (Time 1 n = 616, 296 females, mean age 5.6, from middle to high socioeconomic backgrounds; Time 2 n = 397) with no reading experience at study onset suggest that the development of phonological awareness is delayed in Spanish. Furthermore, our results show that phonological awareness does not contribute to the prediction of reading acquisition above and beyond other preliteracy skills. Letter knowledge indexes children's ability to identify phonemes and thus takes a more central role in the prediction of early reading skills. Therefore, we underscore the need to thoughtfully address the distinctive features of the reading acquisition process across orthographies, which should be taken into account in models of reading and learning to read.