This study examined the factors contributing to the early school adjustment of children at risk of school failure from preschool enrollment to fourth grade. A longitudinal model that used data on 1,255 low-income, minority children was tested in an effort to bring about an improved understanding of the factors that influence a wide range of early school outcomes. Outcomes concerned included cognitive readiness at the time of school entry, cognitive and teacher-rated adjustment in first grade, and four measures of school competence in fourth grade: (1) grade retention; (2) cognitive achievement in reading; (3) teacher ratings of school adjustment; and (4) children's perceptions of school competency. Results indicated that children's school adjustment from kindergarten to fourth grade was marked by declining achievement, frequent moves from one school to another, and increasing grade retention. Regression analyses indicated that cognitive readiness and the early adjustment indicators of first grade reading achievement and teacher ratings were significantly related to fourth grade outcomes and substantially mediated the effects of readiness attributes of preschool participation and family background measures. Findings also showed that parent involvement in school was positively related to achievement and teacher ratings of children's progress in school. (SH)