Are programs that emphasize systematic phonics instruction truly superior to other types of programs for young readers, as the National Reading Panel claims? The authors conducted a study of three different programs to see what kinds of readers are actually emerging from them. Two were commercial programs that used explicit and systematic phonics instruction as a central piece in early reading learning: Direct Instruction (DI)4 and Open Court (OC). The third was a literature-based program, labeled Guided Reading (GR), wherein students were taught to use multiple strategies to focus on the meaning of what they read. This program was an adaptation of work by Irene Fountas and Gay Su Pinnell. The 84 students in the study live in urban settings and are of low socioeconomic status, but they are not coded for special education or for receiving ESL (English as a Second Language) services. To study the reading processes of these students, second-graders were asked to read books to aloud. Their reading was studied using "miscue analysis," an established research tool that analyzes oral reading "miscues" or divergences from the text to reveal a reader's use of phonics cues, language structure cues, and meaning-based cues. Thus researchers learned about the students' reading strategies, as well as their skill in comprehending as they read. To measure the students' comprehension, they were asked to retell the story they had read. These retellings were analyzed for inclusion of characters, setting, plot episodes, inferences and connections, and general cohesion (smoothness and completeness of the retelling). From an interview with the students, which included questions such as "When you are reading and you come to something you don't know, what do you do?" Researchers determined their awareness of reading strategies and their perceptions of reading. In addition, the children took a phonics test from the Woodcock Johnson Psycho-Educational Battery, wherein they "read" a list of non-words. Researchers observed language arts instruction in the children's classrooms and interviewed principals and teachers to learn their perceptions of the reading program in use. These observations of language arts instruction allowed us to compare what the students said with what they did while reading and with what was going on during their reading instruction. In this manner, the authors built a comprehensive picture of the students' actual understanding and practice of reading. The instruction provided by DI and OC is similar in many ways. The DI program is heavily scripted, while the OC program provides teachers with detailed lessons. In contrast, at the third site of this study, phonics instruction was integrated into reading and writing. At the GR school, students learn phonics in the context of reading and writing. The profile that emerged from the GR school reveals that the students use phonics while reading in ways similar to the students at the DI and OC sites (no significant difference in measures of phonics use in and out of context), but with a definite concern for meaning. In addition to describing setting and characters, the GR students' retellings are cohesive, and they reflect a tendency toward forming inferences and making connections. These findings run contrary to what would be expected given the NRP's determinations.