Cognitive skills, engagement in school, social skills, and physical well being are all important for children's early success in school. However, some groups of children begin kindergarten less ready for school than others and, by the end of first grade, still haven't "caught up" with their more successful peers. This CrossCurrents brief reports on indicators of cognitive knowledge and skills, social skills, engagement in school, and physical well being among children entering kindergarten and describes how these indicators change as children progress from kindergarten to first grade. In particular, variations in these indicators among socioeconomic and demographic subgroups of children is examined. Newly available, nationally representative data, found that, on the average, all groups of children make progress on five out of seven indicators of well being and development over the first two years of formal schooling, regardless of their socioeconomic or demographic characteristics. However, it was also discovered that children at lower socioeconomic levels, those from racial or ethnic minority backgrounds, those whose parents do not speak English at home, and those who are disabled tend to be less prepared for school upon kindergarten entry. Furthermore, these more vulnerable children fail to catch up to their peers by the end of first grade. These findings illustrate some of the challenges that new education policies are attempting to address. The information presented here highlights the varied skills that contribute to school readiness and can help policymakers, teachers, and parents identify subgroups of children in need of further support to achieve the academic goals set for all children in our nation. (Contains 37 endnotes.)