This article is a synthesis of early literacy research organized according to critical lessons that delineate our shared knowledge base that we name a 'transactional perspective on early literacy development.' The critical lessons are grouped into three sets to present the continuum of methodological stances that interpretive researchers take as they design and carry out early literacy studies. This synthesis is particularly timely now--as children and teachers in classrooms around the world struggle to maintain control over literacy learning and teaching within narrow governmental agendas and mandates. Given current governmental agendas (i.e. No Child Left Behind in the USA, the National Literacy Strategy in the UK, among many), it is critical to remember that we share a robust theory, a transactional view of early literacy development that explains how young children come to be literate members of society.