It has been observed in Japanese children learning to read that there is an early and rapid shift from exclusive reading of hiragana as syllabograms to the dual-use convention in which some hiragana also represent phonemic elements. Such rapid initial learning appears contrary to the standard theories of reading acquisition that require instruction in nonlexical procedures for learning phonemic elements of an orthography. However, the alternative Knowledge Sources theory implies that the shift would be achievable from lexical input by which the learner acquires an implicit formation principle for this secondary phonemic function of hiragana. In two training experiments (Studies 1 & 2), this hypothesis was examined in transfer tests with 5-year-old Japanese and with 14-year-old English-speaking beginner learners of Japanese. As predicted, relative to phonological controls, very limited lexical training of exemplar hiragana words transferred to phonemic use of other (previously unknown and untrained) hiragana in untrained words, but not in isolation from these words. In Study 3, at both beginning and adult reading levels, novel hiragana symbol combinations were created to represent individual phoneme elements in ways that do not exist in conventional hiragana orthography but are exemplars for induction of a potential generalized formation principle of the secondary phonemic function of the system. At all reading levels there was evidence of use of this generalized formation principle, a result not explained by the standard theories but implied by the alternative theory, which offers a potential universal feature of learning to read.