The annotated materials contained in this list of children's books for 1981 have been selected for literary merit, usefulness, and enjoyment, and are intended to reflect a year's publishing in a balance between books to be enjoyed for free reading, those for reading aloud, and those recognized as valuable for individualized reading programs or as background and supplements to the school curriculum. The 138 titles for preschool through junior high school age children are divided into the following areas: (1) picture and picture story books; (2) first reading; (3) stories for the middle group; (4) fiction for older readers; (5) poetry and song; (6) folklore and fable; (7) history, people, and places; (8) biography; (9) arts and hobbies; (10) nature and science; and (11) psychology. Appropriate grade levels for each title are included in the annotation. (HTH)