The Matthew effect hypothesis provides a theoretical framework to describe the development of individual differences in reading ability. The model predicts an increase of individual differences in reading. Reciprocal relationships between reading and other factors seem to cause these increasing differences. This longitudinal study of 3 years was concerned with uncovering the existence and causes of increasing individual differences in reading in the early elementary grades. Data were analyzed within a structural equation modeling framework. The results clearly indicate increasing individual differences for word recognition skills. For reading comprehension, no such effects could be established for this limited time period. More important, some evidence for interactive relationships between reading and other cognitive skills, behaviors, and motivational factors, hypothesized to cause increasing differences between readers, was found.