Developing literacy skills at the preschool level is a crucial foundation for continued success in school environments; nevertheless, questions about when and how to teach beginning reading and writing are among the most controversial topics in early childhood education. As part of a series of works examining strategies for school improvement and dropout prevention, this monograph interweaves two effective strategies--early childhood education and reading/writing programs--to provide information on early literacy development and how it can be nurtured. The monograph offers definitions and examples of early literacy development, focusing attention to the importance of positive attitudes and dispositions toward reading and writing. Practical suggestions are provided with respect to the physical environment, materials, routines, and schedules that promote literacy development. The monograph focuses on home-school connections and the assessment of early literacy problems. It also includes a list of appropriate books by age level and computer software and Web sites. (Contains 15 references.) (KB)