International research findings have repeatedly confirmed the significance of speech and language processing skills and letter knowledge for successful literacy acquisition. However, the importance of these skills for early literacy success in German speakers remains uncertain. The present longitudinal study aimed to explore this issue. Sixty-nine German-speaking children were assessed in nursery a few months before starting school (mean age 5;11) and in Grade 1 (mean age 6;11) with tests of phonological awareness, rapid automatized naming, expressive vocabulary, grammar comprehension, letter knowledge, and nonverbal reasoning. Grade 1 assessments also included measures of reading accuracy, speed, comprehension, and spelling. The results confirmed that speech and language processing skills and letter knowledge before and around the time of school enrolment explain individual differences in early literacy development, with letter knowledge and phonological awareness emerging as most important predictors. No variance in literacy performance was uniquely predicted by nonverbal reasoning.