This study examined the effects of children's reading skills and interest in reading-related tasks on teacher perceptions of children's literacy skills (reading and spelling) and the respective individualized support for children during the first two years of formal schooling. The participants were 334 children and their classroom teachers. Identical measures were administered at three time points (at the beginning of Grade 1 and at the end of Grades 1 and 2). Children's reading skills were assessed with the word reading fluency test, and their interest in reading was assessed with self-reports. Also, teachers evaluated each child's level of reading and spelling skills and reported the level of individual literacy support they provided. The results showed that children's poor skills in reading at the beginning of Grade 1 were related to both teacher perceptions of children's skills as being poor and to increased support at the end of Grade 1. In turn, teacher perceptions of children's skills as being poor at the end of Grade 1 were related to more support at the end of Grade 2. Moreover, children's reading skills at the beginning of school had an indirect effect via teacher perceptions at the end of Grade 1 on teacher support in Grade 2. The findings underscore the importance of examining the role of teacher perceptions in providing individualized support during literacy activities.