<p>The purpose of this systematic observation study was to explore kindergarten and first-grade teachers’ Tier 1 small-group reading instruction for students with or at risk for reading difficulties and examine the effects of instruction on students’ literacy outcomes. We focused on time spent providing instruction in different literacy domains, instructional practices and materials used during text reading instruction, and impacts on student literacy outcomes. We conducted 42 observations of 15 early-elementary teachers’ small-group reading instruction for students with or at risk for reading difficulties. We also conducted semi-structured interviews with teachers to learn more about their instruction and collected student literacy assessment data at the beginning and end of the school year. Results indicated that teachers’ instruction typically aligned with evidence-based practices. Although instructional time was not significantly correlated with improvements in students’ skills for most expected relations, there were three statistically significant relations: phonological awareness instruction and encoding outcomes (<i>r</i> = .39; <i>p</i> &lt; .01), encoding instruction and encoding outcomes (<i>r</i> = .30; <i>p</i> = .04), and comprehension instruction and expressive comprehension outcomes (<i>r</i> = − .32; <i>p</i> = .03). Further research investigating teachers’ instructional practices during small-group reading instruction and their impacts on students’ literacy outcomes is warranted.</p>