Systematic phonics instruction in first language education has recently received considerable research attention due to its critical role in facilitating phonological awareness and processing skills. However, little is known about the effects of systematic phonics instruction on foreign language reading and spelling in an EFL context. This study examined the effects of spelling-based phonics instruction on 9-12 year old Persian speaking learners’ reading and spelling English words. The participants were randomly assigned into two groups: a control group who received non-phonics instruction, and an experimental group who received spelling-based phonics instruction. CORE Phonics Survey (2003), a battery of diagnostic tests and tasks, was used to uncover the effects of phonics on oral reading and word spelling development of the learners. The results of independent-samples t-test revealed that after 10-weeks of instruction, the spelling-based phonics instruction had really significant effects on improving both young Iranian EFL learners’ oral reading and whole word spelling. In other words, the experimental group benefited from spelling-based phonics instruction compared to the group with non-phonics instruction.