The foundation literacy skills of children from differing socio-economic backgrounds were investigated in a cross-sectional study. The children were aged between 4 and 8 years and attended Nursery or Primary 1, 2 or 3 classes. Low socio-economic status (SES) was associated with impairments for chronological age in letter knowledge as well as in both logographic and alphabetic foundation components. There was also an effect on metaphonological skill. However, once the SES groups were equated for reading age, high and low SES performance was indistinguishable. The results suggest that delayed acquisition of foundation literacy skills is traceable to a delay in acquiring letter-sound knowledge. Implications for intervention are discussed in the context of the foundation literacy framework.