Research has shown that there is a relationship between literacy and psychosocial outcomes. The aim of the current research was to determine the effects of a morphology-based literacy intervention on general literacy and writing skills, as well as to determine if the intervention would result in improvements in psychosocial development, including self-esteem, self-efficacy, and resilience. To achieve this, 13 students with learning difficulties, from Year 5 and 6, participated in an intensive literacy intervention that focused on morphology, phonology, vocabulary, and sentence construction. The results and analysis showed significant improvement in most literacy and writing measures, as well as positive and modest improvements in most psychosocial aspects, with greater improvements in ASE and social interaction. Pearson correlations revealed complex and varying links between literacy and psychosocial outcomes. The findings suggest that a morphology-based literacy intervention can have a positive impact on both literacy and psychosocial outcomes, and that students in Year 5 and 6 with literacy difficulties can benefit from such interventions.