This report provides research-based answers to questions about literacy development from infancy to age 6, with emphasis on the development of these skills in precocious readers. The question-answer format considers the importance of reading with young children, other activities to help young children learn to read, normal development of reading and writing skills, the precocious reader, and testing a preschooler's reading ability. Conclusions are organized into recommendations for parents and recommendations for teachers and administrators. An executive summary stresses seven conclusions: (1) children acquire important literacy knowledge and behaviors during the preschool years; (2) effective story reading is interactive and responsive to the child; (3) in early reading development, the child's developing knowledge of language is most important while in later reading development, his/her knowledge of the world and expressive skills becomes more critical; (4) early writing skills may develop in parallel with or out-of-step with reading skills; (5) learning letter names and sounds is an important part of early literacy development; (6) reading failure can be prevented by the early identification of reading difficulties followed by appropriate instruction; and (7) precocious reading is an example of giftedness. (Contains 31 references.) (DB)