The present investigation consists of two studies examining the effects of cross-language transfer on the development of phonological awareness and literacy skills among Chinese children who received different amounts of English instruction. Study 1 compared Chinese students in regular English programs (92 first graders and 93 third graders) with peers who did not receive English instruction (86 first graders and 91 third graders). Study 2 was a 2-year longitudinal study that followed Chinese children from the beginning of Grade 1 to the end of Grade 2; the children attended either an intensive English program (79 children) or a regular English program (80 children). In both studies, children received phonological awareness tasks in English and Chinese, and literacy measures in Chinese. Results suggest that (a) English instruction accelerates the development of Chinese phonological awareness and Pinyin skills through cross-language transfer; (b) the pattern of cross-language transfer reflects the phonological features of English, the source language; and (c) a threshold level of 2nd language proficiency is required before any positive effects can be detected in the 1st language. (Contains 1 footnote, 6 tables, and 9 figures.)