This study investigated the relationship between selected child and family demographic characteristics (child age, child sex, child birth order, maternal education, and parent language status), family processes (parent-to-child reading at home, and parent expectations about child’s educational attainment), and preschool experience with poor Peruvian first-grade children’s oral language and reading abilities, and examined whether those factors help to explain differences among children living in poverty. First-grade students ( N = 137) of five schools in a poor neighbourhood of Lima, Peru participated in the study. Children were given picture vocabulary, verbal analogies, letter-word identification, and reading comprehension tests. Information about the children and their families was gathered through parent interviews. Children whose parents had higher expectations obtained higher scores on picture vocabulary, verbal analogies, letter-word identification and reading comprehension. Children who attended private and public preschools obtained higher scores in letter-word identification than those who did not attend preschool. These findings support previous research on the relevance of family beliefs, above and beyond sociodemographic variables, as contributors to children’s oral language and reading, and provide some evidence of the benefits of preschool among children living in poverty. Future research is recommended to identify the specific strategies used by low-income Peruvian parents with high expectations to support their children’s language and reading; and to determine the relationships between type and quality in Peruvian preschool programmes, and programme practices that may differentially affect children’s language and reading skills.