The authors examined second grade reading accuracy and fluency and their associations via letter knowledge to phonological and language predictors assessed at 3.5, 4.5, and 5.5 years in children in the Jyväskylä Longitudinal Study of Dyslexia. Structural equation modeling showed that a developmentally highly stable factor (early phonological and language processing [EPLP]) behind key dyslexia predictors (i.e., phonological awareness, short-term memory, rapid naming, vocabulary, and pseudoword repetition) could already be identified at 3.5 years. EPLP was significantly associated with reading and spelling accuracy and by age with letter knowledge. However, EPLP had only a minor link with reading fluency, which was additionally explained by early letter knowledge. The results show that reading accuracy is well predicted by early phonological and language skills. Variation in fluent reading skills is not well explained by early skills, suggesting factors other than phonological core skills. Future research is suggested to explore the factors behind the development of fast and accurate decoding skills.