Although fundamental beginning reading skills are highly related to later reading success (National Institute of Child Health and Human Development, 2000), it remains unclear how these beginning reading skills impact the social adjustment of kindergarten through second grade children. Therefore, the purposes of this study were: (a) to examine the strength of the relationship between beginning reading skills (i.e., letter-word identification, word attack, passage comprehension, and auditory comprehension) and social adjustment (i.e., social skills, problem behaviors, and academic competence); and (b) to assess the beginning reading skills that predict the social adjustment of elementary aged public school children (K-2). A range of significant correlations was present between measures of beginning reading skills and ratings of social adjustment. In general, early literacy skills and skills of auditory comprehension were significantly and positively associated with measures of social skills and academic competence. In addition, early literacy skills and vocabulary were negatively associated with measures of problem behaviors. Letter-word identification was the best predictor of social skills (? = .41), problem behaviors (? = -.31), and academic competence (? = .66). In addition, vocabulary (? = .17) and overall auditory comprehension (? = .18) predicted social skills and academic competence, respectively. Findings, limitations, and future research needs are discussed.