A study examined the development of reading, written expression and listening comprehension over 3 years. The participants were 77 students in Brisbane, Australia, who were identified by school staff as having a learning difficulty at the end of grade one and who were matched with the same number of normally achieving children attending the same classes. The children were assessed on each of the literacy measures annually. Multivariate analysis of variance indicated differences between the groups on all measures with a gender effect for listening comprehension in grade four; children with a learning difficulty were less successful on all tasks than their peers. Correlational analyses revealed inconsistent patterns between the two groups with correlation coefficients being typically lower for the children with a learning difficulty than for their peers. Causal modeling demonstrated the power of reading in grade two to predict future reading performance of all children in the study; however, different patterns of influence across the language arts domains were found for both groups. (Two tables and two figures of data are included. Contains 44 references.) (Author/RS)