The primary purpose of this study was to investigate how children's responses to literature can help develop literacy. The subjects were 15 first-grade students at Overstreet Elementary School in Starkville (Mississippi). Two school observations were carried out prior to the collection of data on individual students. Case studies were conducted for each student to answer the following questions: what do the child's choices, reactions, comments, and questions reveal about cognitive skills related to literacy? Observational data were used to place the students into one of the stages of cognitive growth developed by Jean Piaget. The students fell into the stages of preoperational (ages 2-7 years) and concrete operational (7-11 years). Coinciding with Piaget's developmental stages are V. Lowenfeld and W. L. Brittain's stages of art development. Paralleling the preoperational and concrete operational stages of cognitive development are the preschematic and schematic stages of art development--students portrayed indicators in their drawings that identified each with one of the stages. A study of the relationship between the stage of cognitive development and the stage of art development in relation to the reading abilities of each student showed that for 10 of the 15 students, literacy development was determined by cognitive development. Classification of the artistic responses for these 10 students also paralleled the literacy/cognitive development classification. Cognition and literacy can be encouraged by providing children with a wide variety of reading, writing, and drawing materials, and by helping children become more aware of their environment and their relationship to that environment. (ND)