A sample of 79 first grade children, selected from a total sample of 350 subjects from an upper middle class school district, were involved in this study. The sample population was divided into three reading groups (depending on their reading scores) to permit statistical comparisons among groups with differentiated reading achievements. A battery of tests was administered individually to measure the following skills: reading achievement, hearing vocabulary, expressive vocabulary, and psycholinguistic processing ability. A descriptive analysis of the data revealed that the selected population was significantly above average on all variables measured. In order to test seven proposed hypotheses, a correlation matrix of all variables was constructed for the total sample and the mean differences between each of the three reading groups on all variables were tested through t-test comparison. Tests of the hypotheses revealed that reading achievement was significantly related to both expressive and hearing vocabularies and to the following ITPA scores: composite psycholinguistic age, mean automatic level scores and mean auditory vocal score. The study revealed that the reading achievement of beginning first grade children is associated with receptive and expressive vocabulary development. (Author/TS)