In this paper we begin by addressing the concept of literacy, which for us is “the ensemble of representations and processes that an individual acquires as an obligatory and direct consequence of learning to read and write”, and distinguish it from other conceptions that can be found in the literature. In the remaining of the paper we discuss some of the most recent developments in the psychology of literacy: (i) the occurrence of language differences in the progressive mastery of the orthographic code; (ii) the neural basis of written word identification; and (iii) the consequences of literacy on spoken word identification.