The paper reports a series of studies of reading and metaphonological proce
ssing by children in their second year in primary school (aged 6 years). An
earlier study had established that, in the first year of learning, perform
ance was characterized by a small-unit approach in which graphemes and phon
emes were emphasized. In the second year, reading became more sensitive to
the frequencies of rime structures in the lexicon. Capacity to generate wor
d analogies for nonwords also showed increasing commitment to rime-based re
sponses, and this trend was strongly linked to reading age. The present res
ults suggest that a small- unit approach to reading is augmented by a large
-unit approach as development proceeds. This trend was reflected in perform
ance on a test of explicit phonological awareness. When asked to report the
segment of sound shared by two spoken words, Primary 1 children were poor
in reporting shared rimes but relatively adept in reporting shared phonemes
. During Primary 2 there was an improvement in ability to report shared rim
es, and this trend was also related to reading age. These results are discu
ssed in relation to the influence of instruction and the nature of the orth
ography in determining the course of reading development.