This report explains why reading story books to young children (an activity assumed to help in the acquisition of literacy, although there is no unambiguous evidence in support of this assumption) is likely to be important and reviews the evidence about the role it might play in literacy development. The first section of the report examines distinctions in oral and written language and suggests why written texts contain language structures that could be more difficult to acquire than oral language structures. The second section shows how story book reading activities enable children to link their listening and speaking skills to text comprehension. The third section reviews connections between story book reading and later reader achievement, describing studies that relate home literacy activities with later reading. The fourth section reviews intervention research that connects story book reading interventions to children's beginning reading achievement. One figure and six tables of data and transcriptions of conversations about reading between child and mother and teacher and child are included, and 69 references are attached. (SR)