An action research study implemented a program for improving the reading ability of first-grade students who enter school with low reading readiness skills. The targeted population came from a mid-size, middle-class town in northern Illinois that has experienced recent growth and socioeconomic changes. The problem was evidenced by teacher assessment, teacher observation, and standardized test scores. Probable causes for low reading achievement were attributed to the changing demographics of the community, classroom overcrowding, home influences, and curricular issues. District concern was centered on a lack of adequate phonics instruction in the whole language curriculum. After reviewing the solution strategies suggested in the literature and analyzing the problem setting, an intervention was designed to integrate and transfer phonics skills instruction within a whole language curriculum. Post intervention data revealed an increase in letter/sound relationship and phonemic awareness, specifically knowledge of initial and final consonants and vowel sounds. This in turn resulted in improved reading achievement scores. The combination of phonics skills and a whole language curriculum appears to be a "winner" for meeting the needs of all children and improving the reading achievement of first graders. (Contains 18 references and 8 figures of data; appendixes contain a literacy screening packet and roster, evaluation instruments, lesson plans, phonics worksheets, skill drills, a home reading log, a book buddy reading guide and log, and instructions for taking running records.) (Author/RS)