The goal of the present 1-year long longitudinal study was to determine which home literacy variables were effective in stimulating early reading skills of children with cerebral palsy (CP) directly or indirectly via the reading precursors. Parents of 35 children with CP completed questionnaires regarding aspects of the home literacy environment (HLE). The reading precursors: Vocabulary, Syntactic skills and phonological awareness, i.e., Rhyme and Phonemic awareness, were assessed at the end of Kindergarten and the end of Grade 1, while the early reading skills Letter knowledge and Word recognition were assessed only at the end of Grade 1. Three HLE variables were found to be related to reading precursors and early reading skills: Parent literacy mediation, Word orientation and Story orientation activities during shared book reading. Path analyses showed that these three HLE variables were not directly related to early reading skills in Grade 1, but indirectly via the reading precursors, in particular phonological awareness.