Phonological awareness, rapid automatized naming (RAN), letter knowledge, and oral language are all significant predictors of successful literacy acquisition in several languages. However, their relative importance is less clear and depends on language characteristics, the specific aspect of literacy assessed, and the phase of literacy acquisition. This study, therefore, aimed to examine the development of these predictors and their relationship with literacy acquisition through a longitudinal investigation of German-speaking children. Seventy-eight children growing up monolingual German were assessed three times: a few months before starting school (mean age = 5 years 11 months), in grade 1 (mean age = 6 years 11 months), and in grade 2 (mean age = 7 years 10 months). Cognitive predictors were measured at preschool, and literacy outcomes (reading accuracy, speed, comprehension, and spelling) were measured in grades 1 and 2. Correlational and path analyses revealed a complex pattern of relationships between cognitive and literacy skills dependent on the aspect of literacy being measured and the timepoint. Overall, the most important predictor of literacy skill in grade 2 was earlier literacy skills, followed by letter knowledge and RAN. Phonological awareness was less important than RAN, and oral language skills (i.e., vocabulary, grammar comprehension) were least important. The implications of these findings for the understanding of cognitive mechanisms of literacy acquisition and for early detection of literacy difficulties are discussed.