Previous research on age and schooling effects is largely restricted to studies of children who begin formal schooling at 6 years of age, and the measures of phoneme awareness used have typically lacked sensitivity for beginning readers. Our study addresses these issues by testing 4 to 6 year-olds (first 2 years of formal schooling in the United Kingdom) on a sensitive dynamic measure of phoneme awareness and tests of early literacy. There were significant effects of both age and schooling on the dynamic measure of phoneme awareness, word reading, spelling, and letter name knowledge, but there were no significant Age x Time interactions. This indicates that older children within this age group generally outperform their younger classmates (although they do not make faster progress) and that this advantage is developed prior to the start of school. (Contains 1 table.)