With dramatic changes and recent advances in multimedia, digital technologies through computers propose new ways for introducing kids to the literacy. Literacy educators have stated that traditional printed books are not sufficient and electronic books have the potential to change reading skills. As a valuable tool in educational settings new and varied forms of technology, specifically, interactive CD-ROM storybooks have been used in classroom literacy learning by students and teachers. Although, several studies indicate that interactive CD-ROM storybooks help children develop visual recognition and increase reading comprehension, the results of the experimental studies previously carried out in this area have been conflicting and often hard to interpret. Therefore, the main purposes of this review are to identify the potential benefits, functions and disadvantages of interactive storybooks and assess mixed results of previous studies related to interactive CD-ROM storybooks. (Contains 1 table.)