Written for teachers who are interested in learning how to use literature to enhance emergent literacy growth, this handbook, in two volumes, focuses on how to implement integrated, literature-based, thematic units that stress the development of effective strategies required of independent, self-directed competent readers and writers. The first section of Volume One discusses research related to sound current theory and practice in the area of emergent literacy. The second section discusses salient aspects of implementing the units and introduces teachers to the Transactive Teaching/Learning Model which provides a daily framework for each unit. The third section of the handbook describes the daily teaching and learning activities for the "Old Favorites" (nursery rhymes and favorite tales) and the "Friendships" (developing social skills and cooperation) units that are of high interest to kindergarten and first-grade students. Included in each chapter are suggested discussion questions and literature bibliographies. An appendix discusses appropriate assessment for this age level and contains assessment instruments. The first section of Volume Two discusses research related to sound current theory and practice in the area of emergent literacy. The second section discusses salient aspects of implementing the units and introduces teachers to the Transactive Teaching/Learning Model which provides a daily framework for each unit. The third section of the handbook describes the daily teaching and learning activities for the "Food from the Farm" (Expanding the Learner's Horizons--Community and Environment) and the "Dragons from East and West" (Expanding the World of Imagination and Fantasy) units that are of high interest to kindergarten and first-grade students. Included in each chapter are suggested discussion questions and literature bibliographies. An appendix discusses appropriate assessment for this age level and contains assessment instruments. (RS)