This study showed that word knowledge is a significant predictor of decoding, listening comprehension, and reading comprehension in Chinese children learning English as a second language. Moreover, the results also indicated that vocabulary contributed to reading comprehension fully through decoding and listening comprehension, and the importance of emphasizing word knowledge in developing children’s reading comprehension as a second language at an early stage of learning to read. This study implied that morphological awareness and vocabulary are likely to be essential skills of decoding, listening and reading comprehension development at an early stage of learning a second language. Therefore, teachers and parents can include training on morphological awareness to effectively facilitate young children’s learning to read in English lessons in Hong Kong.