From a sociopedagogical perspective, literacy development in preschool is conceptualized as a social phenomenon. Sociopedagogical models emphasize the connection between family and school processes to foster children’s literacy competences and parental involvement. Although contemporary models regarding parental involvement reflect its multidimensional and multilevel nature, research focusing on early literacy mainly addresses certain parenting practices, especially at home, and their association with a few literacy skills. Based on Bronfenbrenner’s bioecosystemic theory, Epstein’s model of overlapping spheres of influence and the typology of parental involvement as well as Rohde’s Comprehensive Emergent Literacy Model, the present study investigates how different dimensions and components of parental involvement interact to affect young children’s literacy competences. We investigate the complex relationships among all dimensions of parental involvement and their association with children’s literacy outcomes. Additionally, we explore the role of several contextual factors (children’s age, parental education, urbanity, number of children’s books) in these associations. Parents of 214 typically developing children aged 4–6 years filled in four parent-report scales developed and validated for measuring the different dimensions of parental involvement and children’s literacy competences. Results illustrate how multilevel parental practices mediate the effect of literacy-related parental perceptions and family–school relationships on children’s literacy competences. Among the contextual factors, only maternal education was found to have a robust, albeit indirect, effect on literacy outcomes. Implications about the school’s role and strategic planning in promoting literacy-focused parental involvement are discussed.