Intended for reading and language arts teachers of multiethnic classes, this report discusses the use of children's literature featuring Asian American characters and how these books can have a negative or positive influence on attitudes toward and of ethnic groups. The first part discusses the importance of presenting Asian American children's literature appropriately and how misuse can have a damaging effect on children of Asian descent. This section also reviews studies that show how exposure to ethnic literature can influence attitudes positively or negatively and presents guidelines for evaluating Asian American children's books. The second section is an annotated list of 12 recommended Asian American children's books. The third section presents ideas and strategies for teaching Asian American folktales, playing with language sounds, comparing cross-cultural experiences, examining history, and experiencing Asian American history through role playing. (HTH)