The purpose of this study was to examine the efficacy of a supplemental peer-tutoring reading program on phonological and reading fluency skills of first graders (N=78) who were in predominantly Hispanic Title 1 classrooms. Sixty-eight percent of the students were Hispanic, all were English speaking. Six classrooms were randomly assigned to either the peer-assisted learning strategies (PALS) program or a control condition. PALS students participated in a peer-mediated early literacy intervention three times a week for 20 weeks for a total of 30 hours. Reading fluency measures taken at fall, winter, and spring showed statistically significant differences favoring PALS on phoneme segmentation and nonsense word fluency. Additionally, results analyzed by ethnic subgroups (Hispanic and non-Hispanic) revealed a differential pattern of response to PALS intervention. Social validity questionnaires reported that teachers and students viewed PALS in a positive light.