Literacy may be a more powerful indicator of brain reserve than years of education. Literacy level may be a proxy for native intellectual capacity or life experience that can compensate for brain damage or provide brain reserve. Alternately, the experience of acquiring literacy skills may in itself change the organization of the brain and increase protection against cognitive decline. However, because people with low levels of literacy obtain poor scores on most cognitive measures, only longitudinal studies can elucidate the role of reading ability in reserve. We determined whether literacy skills could predict cognitive change in a sample of 136 English-speaking African American, Caucasian, and Hispanic elders selected from a longitudinal aging study in New York City. According to a physician's independent examination, all participants were nondemented throughout the four longitudinal assessments. Literacy level was assessed using the WRAT-3 reading subtest. After accounting for age at baseline and years of education, GEE analyses showed that elders with low levels of literacy had a steeper decline in both immediate and delayed recall of a word list over time as compared to high literacy elders. Our findings suggest that literacy skills are protective against memory decline among nondemented elders.