This paper reports a study of the reading and spelling skills of grades 1-3 Arabic-speaking children in Bahrain. Children were tested on their literacy skills (single word reading and spelling), their ability to decode letter strings (non-word reading) and measures of phonological awareness, short-term memory, speed of processing and non-verbal ability. These tests were included to identify the best predictors of literacy skills amongst Arabic young readers. The results were consistent with the literature based on tests of English-speaking children in that measures of phonological skills (decoding and awareness) were the best predictors of variability in reading and spelling among the Bahraini children. The results are discussed in terms of the literacy experiences of the children and the use of short vowels in Arabic writing. (Contains 9 tables.)