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This study suggests a comprehensive conceptualization of teacher knowledge for teaching early literacy in primary schools. Following the discourse on the professional knowledge of teachers, we argue that teachers’ knowledge relevant to support reading and writing at the beginning of primary school education is multidimensional by nature: Teachers need content knowledge (CK), pedagogical content knowledge (PCK), and general pedagogical knowledge (GPK). Although research on teacher knowledge has made remarkable progress over the last decade, and in particular in domains such as mathematics, relevant empirical research using standardized assessment that would allow in-depth analyses of how teacher knowledge is acquired by pre-service teachers during teacher education and how teacher knowledge influences instructional quality and student learning in early literacy is very scarce. The following research questions are focused on: (1) Can teachers’ professional knowledge for teaching early literacy be conceptualized in terms of CK, PCK, and GPK allowing empirical measurement? (2) How do teachers acquire such knowledge during initial teacher education? (3) Is teachers’ professional knowledge a premise for instructional quality in teaching early literacy to students? We present the conceptualization of teacher knowledge for teaching early literacy in primary schools in Germany as the country of our study and specific measurement instruments recently developed by our research group. Assessment data of 386 pre-service teachers at different teacher education stages is used to analyze our research questions. Findings show (1) construct validity of the standardized tests related to the hypothesized structure, (2) curricular validity related to teacher education, and (3) predictive validity related to instructional quality. Implications for teacher education and the professional development of teachers are discussed.