This study investigated the predictive validity of a dynamic assessment designed to evaluate later risk for reading difficulty in bilingual Latino children at risk for language impairment. During kindergarten, 63 bilingual Latino children completed a dynamic assessment nonsense-word recoding task that yielded pretest to posttest gain scores, residuum gain scores, and modifiability scores. At the end of first grade, the same participants completed criterion reading measures of word identification, decoding, and reading fluency. The dynamic assessment yielded high classification accuracy, with sensitivity and specificity at or above 80% for all three criterion reading measures, including 100% sensitivity for two out of the three first-grade measures. The dynamic assessment used in this study has promise as a means for predicting first-grade word-level reading ability in Latino, bilingual children.