Studies comparing associations between early literacy related activities and developmental outcome among ethnically diverse groups of children are scarce. The aims of this study were to: (a) document the differences in Turkish immigrant (n = 79) and German (n = 88) preschool children's home literacy environment (HLE), cognitive, and speaking proficiency test scores, (b) identify predictors of HLE and developmental status, and (c) disentangle effects of education and ethnicity on children's HLE and developmental status. Turkish immigrant children, on average, had lower HLE, cognitive, and speaking proficiency test scores when compared to their German peers. After controlling for parent education, HLE predicted children's test scores in both groups. Similarities in predictive patterns emphasize positive effects of a stimulating HLE for young children's development, irrespective of the cultural specificity of dyadic bookreading. Our findings suggest that increased efforts should be made to develop culturally sensitive intervention strategies to facilitate access to print materials for children and to promote both mothers' and fathers' bookreading.