This article describes the patterns of literacy development in children from stable home environments who were prenatally exposed to crack or cocaine. The article includes a brief overview of observations from the first year of study followed by a focus on patterns of development observed during Year Two. During the second year, the children continued to develop in what is considered to be an age-appropriate manner, with only seven children receiving special education support. A few children experienced setbacks in their learning, but there seemed to be reasonable causes for these setbacks. During this second year, the importance of classroom context, as established by the teacher, became an important aspect in the literacy development of this group of children. The article concludes with one case study highlighting the importance of classroom context in a child's literacy development.