The primary goal of this research was to extend our understanding of the strengths and weaknesses inherent in online and offline early literacy software programs designed for young learners. A taxonomy of reading skills was used to contrast online software with offline closed system (compact disc) based programs with respect to number of skills taught, quality of instruction and scaffolding during instruction. Overall, online programs were more comprehensive and provided instruction for more skills than offline software at either the Kindergarten or Grade 1 level. However, offline programs demonstrated some developmentally appropriate selectivity in skills trained. Quality of instruction was variable within and across all programs. Scaffolding of instruction was also variable and surprisingly few programs, either online or offline, provided automatic movement across levels of difficulty. These outcomes have important implications for the selection of instructional materials by parents and educators involved in early literacy instruction and also for future software design.