A study examined the development of phonemic awareness and its relationship to beginning reading among 20 first-grade children at risk for failing to learn to read and write. Their instructional programs were observed; their levels of reading, writing, and phonemic awareness development were measured in October and April; and their home literacy experiences were surveyed by questionnaire. Findings corroborated previous investigations in two ways: (1) phonemic awareness is necessary, but not alone sufficient for reading success; and (2) measures of invented spelling are not only reliable indicators of phonemic awareness, but correlate strongly with reading achievement. Findings also show that instruction that includes repeated readings of predictable text and opportunities for writing using invented spelling contributes to phonemic awareness development. Finally, the findings suggest that home literacy activities, both before school entry and during first grade are also influential in the development of children's phonemic awareness. (Eight tables of data are included; 45 references and 3 appendixes--containing selection criteria for classrooms and focal children; the test battery for assessment of phonemic awareness, reading, and writing; and the parent questionnaire--are attached.) (Author/SR)