The present study investigated the development of literacy skills of deaf and hard-of-hearing (DHH) children in Japan. The three components of literacy, vocabulary, orthographic knowledge, and grammatical knowledge were assessed by using the subtests of the Adaptive Tests for Language Abilities (ATLAN), based on the item response theory developed by the authors). The participants consisted of 207 DHH children (first through twelfth grades) in Study 1, and 425 hearing children (first through sixth grades) in Study 2. The findings show that more than 80% of DHH children's vocabulary variance was explained by the other two componential skills, while the three tasks' difficulty was different. More specifically, their vocabulary and especially, their grammar lagged behind those of hearing children, whereas the difference between the two groups on "kanji" (one of the three orthographic systems in Japanese taught during the school years) was less. Although considerably delayed, their pattern of responses in grammar was similar to that predicted from normative data. Effective instruction for DHH children's literacy skills was generally discussed.