A two-year study is reported of the transfer of two literacy skills, narrative comprehension and learning from text, from elementary school children's first language (Spanish) to their second (English). For each skill, the primary research question was the degree to which the students' first language (L1) performance was predictive of their second language (L2) performance. Subjects were from bilingual education programs in two southern California school districts, in kindergarten through sixth grade. Comparison groups of monolingual English-speaking students were used. Students answered comprehension questions about modified versions of Aesop's fables. General results indicate that for both skills, use of previously acquired knowledge is about the same for L1 and L2. This is limited only by the child's code breaking skills for L2, in listening comprehension for younger subjects, and in reading comprehension for older children. Once the basic parsing skills are acquired, the higher order comprehension processes are similar, whether material is presented in L1 or L2. Comparisons with monolingual English-speaking students indicate no negative effect of dealing with both Spanish and English in school. There was some indication that bilingual students with training in Spanish as a second language were slightly more proficient in English than their monolingual counterparts. In addition, English performance of the students of English as a second language equaled that of their monolingual counterparts by the fourth grade, and L1 performance of the two groups was equivalent at all levels. Pedagogical implications are discussed. (MSE)