Designed for use by persons interested in simultaneously initiating a child-care and parent literacy instructional program, this handbook presents a model for the literacy education of families with young children. The handbook begins with definitions of family literacy and discusses the rationale and purpose of a family literacy program. Part 1 provides an overview of Helena, Montana's Family Learning Center project, a literacy and child care program for infants and toddlers which includes an instructional program for parents. Part 2 describes the step-by-step procedures for developing literacy programs with adult instructional components for the child care setting. This part includes details for selecting staff and facilities, developing policies and procedures, planning and implementing the child care literacy and parent literacy components, and evaluating the program. A list of resources for developing a family literacy program is included. Appendices include position descriptions, child care schedules, and forms for the Family Learning Center; forms and information related to the parent instructional component; sample "lab time" activities from the parent and child instructional component; an overview of adult literacy; and an evaluation form for a family literacy program. (Contains 42 references.) (MM)