The general aim of this longitudinal investigation is to characterize the interactions that preschool children have with written communication. Specifically, an attempt has been made to describe (1) the literacy resources available to particular children, (2) the frequency and organization of literacy events in their lives, (3) the functions which literacy serves for them, and (4) the quality of their literacy environments. The sample for the first year of this ongoing study consisted of 12 low income children and their families. The families represented three ethnic groups--Anglo, Black, and Mexican-American. Reportable results were obtained with 10 of the children. Naturalistic observation, self-report, and controlled behavior sampling techniques were employed to gather data. Only findings from the naturalistic observations are discussed in this report. Current foci of research activities are microanalyses of interaction in the construction of reading and writing activities, parent and sibling effectiveness in negotiating the child's zone of proximal development in literacy events, and possible relationships between use of literacy materials and culture. (Author/RH)