This study explored storytelling as it is used in the foreign language teaching method called Teaching Proficiency through Reading and Storytelling (TPRS), a method which uses entertaining stories to introduce and reinforce literacy, especially vocabulary and reading comprehension. One hundred thirteen sixth grade elementary students in an elementary school in Busan participated in this study. Among the 131 participants, 56 students were assigned to the treatment group, and remaining 57 participants to the control group. The treatment group received 48 sessions of TPRS in a year; the control group did not receive any treatment in this study. Before and after the study period, all participants took pretests and posttests using the same instruments: vocabulary and reading comprehension tests. The treatment group demonstrated positive effects from the use of TPRS on the students' development of literacy ability, including vocabulary knowledge and reading comprehension. The study results provided support for focusing on TPRS as an effective and powerful instructional method for improving L2 learners' literacy ability. In particular, there were some differences regarding vocabulary knowledge achievement among the different English proficiency levels, and the TPRS method was more helpful for girls with respect to reading. The findings of this study have educational implications for teaching L2 with TPRS, and to enhance L2 learners’literacy ability in their L2 learning.