This study contrasted the psycholinguistic abilities of good and poor readers from disadvantaged backgrounds after completion of the first grade, using the Illinois Test of Psycholinguistic Abilities. It was predicted that disadvantaged children classified as poor readers would be significantly inferior to those identified as good readers on measures of psycholinguistic ability. The subjects were selected from a population of disadvantaged first-graders in Nashville, Tennessee. One group of subjects was taught to read using the Initial Teaching Alphabet; and the other, using traditional orthography. The subjects were divided into poor readers or good readers, depending upon their scores at the end of first-grade on the Metropolitan Achievement Tests. It was found that the prediction that poor readers would be significantly inferior to good readers on psycholinguistic abilities was partially supported; however, some findings were not consistent. These might be attributed to salient differences between the two reading methods. The results suggest the presence of general deficits in the auditory receptive and vocal expressive abilities of poor reading children. It appears that remediation exercises for such children should focus principally upon improving these abilities in both the syntactical and automatic aspects of language. (Author/JW)