A large body of research evidence illustrated a strong link between phonological awareness and literacy skills in English. In contrast, the research evidence from transparent alphabetic writing systems with one-to-one relationships between letters and sounds tended to be inconsistent. The primary objective of the thesis was to investigate the role of phonological awareness in literacy skills in the highly transparent writing system of Turkish. Two studies were conducted: In the first study, 55 preliterate children (mean age = 67.43 months, SD = 3.62) were followed from preschool into grade 2. After controlling for nonverbal intelligence, vocabulary, phonological short-term memory and letter knowledge, phonological awareness failed to predict reading skills at grades 1 and 2, but it was the strongest predictor of spelling skills at both testing times. Phonological short-term memory emerged as the strongest predictor of reading speed in this study. The second study investigated the concurrent and longitudinal predictive roles of phonological awareness across the five primary grade levels (mean age range = 79.11 - 124.09 months). Three cohorts of children (N = 158) were tested at grades 1, 2 and 4, and re-tested about one year later when they were at grades 2, 3 and 5, respectively. Statistically significant concurrent relationships were observed between the phonological awareness and literacy skills across the five primary grade levels. However, for each testing period existing literacy performance was the best index of future literacy success. The results underscored four mam factors that can influence the observed relationship between phonological awareness and literacy skills: a) the level of transparency of the writing system; b) the timing of measurement; c) the type of literacy outcome measure; and d) the choice of control measures.