Reading instruction for students with MoID is typically limited to sight-word instruction. We developed a 2-part, phonetic instructional sequence based upon Direct Instruction teaching methodology to teach students with MoID word-analysis skills that generalize to untaught words encountered in their environment. Elementary and middle-school students with MoID learned word-analysis skills using simultaneous prompting procedures to explicitly teach verbal imitation of sounds, letter-sound correspondences, retrieval of learned letter-sounds to a predetermined rate of automaticity, and blending with telescoping. After demonstrating mastery of the word-analysis skills the students generalized taught blending skills to untaught CVC words; functional, community words; and environmental, connected-text phrases. A changing-criterion design embedded within a multiple baseline across sound and word sets was implemented for 3 elementary and 2 middle-school students diagnosed with MoID. Students reached mastery criterion for each phase of Initial Phonics and Functional Phonics, and a functional relation was demonstrated between the instructional sequence and students' acquisition of word-analysis skills.