A study evaluated the effectiveness of the first two years of the Reading Recovery program at the McAllen Independent School District, Texas. Thirteen campuses participated in the first year (1991-92) while 16 campuses participated in 1993. In addition, the Literacy Program, designed to expand the positive effects of Reading Recovery strategies in a different format, was started at seven Chapter 1 campuses, where appropriate data from the first two years of the Reading Recovery program were contrasted. Results indicated: (1) students who completed the program in 1992 and 1993 had a high discontinued exit rate (89% and 86%); (2) students served in the second year had a better than average chance of not being retained in the first grade; (3) all discontinued Reading Recovery students showed growth on a diagnostic survey; (4) Iowa Tests of Basic Skills scores for students in both years were in the second quartile instead of the bottom quartile as expected without intervention; (5) teachers, parents, and administrators felt the program was very effective; and (6) the program had a long-term cost benefit to the school, the student, and society. Fourteen figures of data are included with an appendix of data. (RS)