To determine the factors accounting for children's growth in decoding skill, a study examined school entering characteristics--age, sex, ethnicity, and developmental abilities--and school-influenced skills and characteristics--phonemic awareness, letter-name knowledge, basal text, and place in series--of approximately 100 grade one students. Decoding ability was measured by asking the children to read regular or decodable but nonsense words. Intercorrelation analysis of the variables and student performance on three administrations of the decoding text revealed that age and sex were not significant factors in decoding ability, but that language and auditory readiness skills--as measured by the Metropolitan Readiness Tests--and all school-influenced variables were significant, with phonemic awareness showing the greatest predictive value. Children with strong phonemic awareness, whether at, above, or below grade level in reading ability, generally performed best on the third decoding measure, although 15 students with above-average phonemic awareness did have below-average scores. Those findings indicated that phonemic awareness is a necessary but not sufficient prerequisite for learning decoding skills. Other factors might be the need to read decodable words in text and the ability to reason and form generalizations. (Extensive tables of test results are included.) (MM)