Reading motivation is an important factor that influences students' reading achievement. It is the result of interaction between factors in students themselves and in their environment. The purpose of the study was twofold: first, to determine motivational variables that best predict reading achievement and second, to find environmental factors that would make a difference in students' reading motivation. The study comprised 990 third-grade students (507 boys and 483 girls) and their teachers (58). Students' reading motivation was assessed by means of the Reading Motivation Questionnaire for Young Students (Peklaj, Bucik, 2003) and estimates of the amount of time students spent in reading and reading frequency were also collected. Environmental variables were obtained through a questionnaire constructed for teachers. The regression analysis revealed that the factor predicting students' reading achievement is reading self-efficacy. Two elements of teachers' instruction were connected with students' reading motivation, namely, emphasizing the importance of reading and teacher as a reading model. The implications for educational practice as well as for further research are discussed.