The role of verbal working memory (VWM) in early language and literacy development among typical and atypical monolingual children exposed to different orthographies is well established. Less is known how English Language Learners (ELLs) allocate their VWM resources in early stages of literacy acquisition in English (L2). This study examined the role of phonological (PM) and working memory (WM) in L2 decoding, sight word recognition and spelling among ELLs attending kindergarten in an urban Title I school. The results of ELLs' assessments across cognitive and linguistic reading pre-requisites were compared to the assessments on the same measures of typical and specific language impaired (SLI) monolingual peers. Despite decreased vocabulary and lower phonological awareness (PA) skills ELLs did not differ from typical monolingual peers on VWM skills and early literacy outcomes, but outperformed SLIs. However, ELLs relied exclusively on PM for decoding and spelling, which differed from typical monolingual peers. These results provide important information regarding L2 language and early literacy development among Spanish-speaking ELLs, and should help to conceptualize the educational strategies for supporting ELLs based on their L1 structure. Measure of PM may be discriminating criteria between ELLs and SLIs, as poor PM is an established marker for SLI.