There has been considerable debate over the ways in which children's early literacy skills develop over time. Using confirmatory multidimensional scaling (MDS) growth analysis, this paper directly tested the hypothesis of a cumulative trajectory versus a compensatory trajectory of development in early literacy skills among a group of 1233 kindergarteners over a three-year period. Based on age-sensitive subscales of the Dynamic Indicators of Basic Early Literacy Skills (DIBELS), the finding supported the hypothesis of compensatory trajectory of development in early literacy skills. The results indicated a slower growth rate for children who had a higher initial score than those who had a lower initial score so that those who started at a lower point caught up by the end of the second grade. In addition, reading achievement at the end of the second grade did not show a statistically significant difference between these two groups of children. We discussed some substantively important questions in light of the theoretical articulations of constrained skills proposed by Paris (2005). The study also illustrated confirmatory MDS growth analysis as a viable alternative for theory testing. (Contains 4 figures and 3 tables.)