A study was conducted to investigate the effects of child and parent incentives on the acquisition of reading readiness skills of educationally disadvantaged preschool children. Ss were 121 students from Title I kindergarten classes. Four bilingual paraprofessionals were trained to interview parents, administer the pre- and post-tests, and operate the incentive systems at each of the schools. Of the four schools, parents of students in two schools were provided with cash incentives for attending each session. Children in two schools were involved in a progressive incentive system. For every four weeks, there was a subskills test (pre and post) and a different incentive plan, which progress from immediate reinforcement to delayed reinforcement to social reinforcement. Results showed that: (1) there was no statistically significant difference on the improvement of intelligence scores regardless of the child's motivational style or the incentive system used; (2) the parent and child incentive groups performed significantly better than the child or parent incentive groups on the visual discrimination test; (3) when intelligence is held constant, there was no statistically significant difference between ethnic groups on the Clymer-Barrett Pre-Reading Battery, but there was a statistically significant difference between ethnic groups on the informal reading readiness subskill test of matching letters; (4) the parent group receiving incentives demonstrated greater attendance behavior than those parents who did not receive incentives. (KM)