In this study, the socio-cultural variation in reading comprehension development was examined in 331 fifth graders from schools in Lima, Peru. Reading comprehension was measured using an adaptation of the PIRLS Reading Literacy test. The fifth graders' reading comprehension results, measured over the course of fifth grade, were related to the development of word decoding, vocabulary, and motivation for reading. Children's development in these domains was related to their gender, intellectual maturity, home literacy climate, and socio-economic status. Structural Equation Modelling showed that the development of reading comprehension was influenced by the children's ability to decode words, their vocabulary, and reading motivation. Furthermore, gender and intellectual maturity as well as children's home literacy climate and socio-economic status appeared to substantially predict reading comprehension development, directly or indirectly. More than half of the variance in reading comprehension by the end of the fifth grade could be explained based on these predictor variables.