Literacy typically involves the ability to comprehend and manage text language. This study investigated Chinese reading literacy in Atayal and Han students from a single remote area in Taiwan by analyzing possible factors (i.e., ethnicity, socioeconomic status, gender, and daily reading experiences) associated with reading comprehension. A total of 66 Atayal and 76 Han seventh grade students, from the same remote, low socioeconomic status area of northern Taiwan. The results revealed that the listening comprehension performance of the Atayal students was significantly worse than both the national norm and the performance of Han students who participated in this study. Regarding reading comprehension, Atayal students performed significantly worse than the national norm but at the same level as their Han peers. However, Atayal students remained highly similar to both the national norm and their Han peers in terms of the performance of Chinese character size. A further analysis showed that compared to Han students, the main difficulty of Atayal students was advanced reading tasks such as integrating and inferring. Moreover, regression analysis revealed that Chinese character size and listening comprehension were significantly associated with student performance in reading comprehension. After controlling for socioeconomic status by examining the performance of students from adjacent areas, no association was found between literacy and ethnicity, family background, and daily reading experience. The findings suggest that the difference in literacy abilities between ethnicities may be related to socioeconomic status; yet, listening comprehension also plays a vital role in Atayal students' literacy learning. Consequently, literacy teaching of junior high school students in remote areas should emphasize higher-level abilities, for example, integration and inference.