This research analyses the implementation of the reading and writing literacy programme in an Indonesian laboratory school situated in a university. The educational effect of the implementation and the conditions affecting the implementation process are investigated in this study. Although the implementation of the School Literacy Movement (Gerakan Literasi Sekolah/GLS) has been done in most of the schools in Indonesia, the effects of the movement differ greatly between one another, and empirical data on the laboratory schools, which act as centres for educational innovations, are scant. An embedded single-case qualitative research method was employed, and the subject of the investigation was the Laboratory Primary School of Universitas Negeri Malang, along with a contextual reference group of public primary schools in the same cluster. From these findings, it is clear that the project has brought about multidimensional outcomes such as enhanced reading literacy skills, improved writing literacy skills, and development of higher order skills including critical thinking, communication, and learner autonomy. However, the project implementation has been influenced by four major multidimensional challenges which include challenges related to structures and reading materials and institutional support, challenges related to instructions such as literacy instruction and teachers’ development, challenges related to students which have been mainly linked to their motivation and reading skills, and lastly, challenges related to technology which have been related to digital materials and its pedagogical use.