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Low income students are particularly at risk of falling behind their peers in reading development. The goal of this research is to understand the mechanism in which early literacy skills interact with preschool instructional qualities to predict later reading achievement for low SES children. Data was derived from Project Upgrade, a preschool intervention in Florida. Results from hierarchical linear modeling show that literacy skill level at preschool entry has no effect on long-term reading achievement after the preschool intervention. Also, availability of preschool literacy resources predicts later reading achievement for all students. Students with low early literacy skills benefited more than high skilled students from having quality preschool instruction, possibly leading to the disappearance of the literacy gap.