THE SECOND PROGRESS REPORT OF A PROJECT UTILIZING A COMPLEX TEACHING MACHINE, THE EDISON RESPONSIVE ENVIRONMENT INSTRUMENT, TO STUDY THE ACQUISITION OF BEGINNING READING SKILLS BY 5-YEAR-OLDS FROM DISADVANTAGED BACKGROUNDS IS PRESENTED. THE FIRST REPORT DESCRIBED THE EDISON RESPONSIVE ENVIRONMENT INSTRUMENT AND DISCUSSED THE PROGRAMING DEVELOPED AS LESSONS IN THE AREA OF VISUAL SKILLS WERE CONSTRUCTED AND TESTED. THIS REPORT IS CONCERNED WITH THE PRE-READING SKILLS OF LABELING EACH OF SEVERAL LETTER SHAPES WITH ONE OF ITS SOUNDS OR NAMES AND OF REMEMBERING THOSE RELATIONS OVER A PERIOD OF TIME. SOME IMPORTANT FACTORS AFFECTING THE CHILD'S ACQUISITION OF THIS SKILL WERE IDENTIFIED, AND PROGRAMING TECHNIQUES WERE IMPROVED. NINE LESSONS WERE WRITTEN TO TEACH NINE LETTER NAMES. SPECIFIC EXAMPLES OF THE PROGRAMING TECHNIQUES EMPLOYED ARE APPENDED. TWO MAJOR LEARNING SETS WERE DISTINGUISHED--AN ATTENTIONAL LEARNING SET AND A RANDOM RESPONSE SET. IT SEEMED POSSIBLE TO ACCOUNT FOR THE PATTERNS OF ALL THE CHILDREN ACCORDING TO THE TYPE OF LEARNING SET EXHIBITED BY EACH CHILD. STATISTICS CONCERNED WITH NUMBERS OF IRRELEVANT RESPONSES, THE PERCENT OF CORRECT RESPONSES, THE TIME REQUIRED FOR LESSON COMPLETION, AND THE KIND AND NUMBER OF LOWER-CASE LETTERS IN EACH LESSON ARE INCLUDED. (RH)