In recent decades, state policymakers across the country have turned to early literacy policies to address students’ reading proficiency—particularly in third grade. Though states’ policies vary widely in terms of the interventions and supports provided to educators and students, their intent is similar: to get students reading on grade level by the end of third grade. As of 2021, 46 states and the District of Columbia (D.C.) have at least one policy related to third-grade literacy. Nineteen of these states have retention-based policies—meaning that they identify for retention third graders whose state assessment results fall below an established cut score. This brief reviews the research on early literacy policies and concludes that while they may be effective at improving student achievement in the short term, these policies do not include a full range of best practices in literacy instruction. Considering the ultimate goal of improving students’ early reading skills, this brief provides recommendations for policymakers to create effective literacy legislation.