A sample of 283 Hispanic children with literacy performance at entrance to first grade below the median for their school district was studied as part of a larger research project on the predictors of grade retention in grade 1. Following retention decisions, 51 Hispanic students were retained in first grade. Low literacy skills, being young at entrance to first grade, low ego resilience, low support in the teacher-student relationship, and parents' low sense of responsibility for their children's educational outcomes predicted retention decisions. Hierarchical logistics regression investigated the contribution of six categories of variables (academic competencies; socio-demographic characteristics; social, emotional, and behavioral adjustment; resiliency, school context; and home environment) to retention. Controlling for literacy, only being young for grade and parents' low sense of responsibility for their children's adjustment to school made a direct contribution to retention. Early literacy skills were higher for children enrolled in bilingual classrooms than for children in non-bilingual classrooms. Implications for educational policy are discussed.