An investigation is being made of the effects of the interaction between differing socioeconomic backgrounds and two beginning reading programs on the reading achievement of pupils at three ability levels. This report gives the results of data that have been collected for grades 1 and 2 only. Participating were 754 pupils in a small city school district in southern Michigan. The Initial Teaching Alphabet (i/t/a) was used with 350 of the pupils, traditional orthography (T.O.) with the rest. Reading achievement was determined by the Standard Achievement Test; IQ by the Otis Quick-Scoring Test, Form AS; and socioeconomic status (SES) from the fathers' occupations and educational backgrounds. Data indicated that (1) high SES background seemed to benefit high-ability pupils more than low- or middle-ability pupils; (2) first graders from all ability levels and SES backgrounds using i/t/a outperformed their T.O. counterparts on sound-symbol association tests; (3) i/t/a was especially helpful to middle-ability, low-SES second graders; and (4) in no instance did T.O. pupils significantly outperform i/t/a pupils on all grade-1 and grade-2 tests. Graphs and references are included. (NH)