This article explores the ways in which young emergent bilingual children begin to develop literacy in two languages, Spanish and English. Three case studies of four-year-old Mexican-background children and their families living in southern Arizona are presented from a qualitative socio-psycholinguistic perspective. The children's home and classroom interactions were observed and analyzed for patterns of language and literacy in their two languages. The findings show that these emergent bilinguals learn and develop their own theories and concepts about language and literacy from an early age. The conversational participants and interlocutors were among the factors that directly influenced children's development of language and literacy in Spanish and English. In addition, context was another important factor that contributed positively to the development of their emergent bilingualism and biliteracy. Finally, I discuss the language-literacy strategies that these Mexican-background children use as they try to make sense of their metalinguistic and biliteracy knowledge, while developing additional literacy tools and resources in both Spanish and English. (Contains 5 figures, 1 table, and 5 notes.)