This study identified distinguished children's books read by students attending two elementary schools in Honolulu, Hawaii, and analyzed the effect of reading ability on children's choice of reading material. Average reading scores on the Stanford Achievement Test (SAT) were above the norm for students attending one school and at or below the norm for students attending the other school. Data were collected from filled library circulation cards that the school librarians had retained for a 5-year period from September 1975 to June 1979. "Distinguished" books were defined as children's classics, award-winning titles, and honor books. Titles were divided into five categories: Easy Fiction, Juvenile Fiction, Folk Literature and Fairy Tales, Poetry and Verse, and Information and Concept Books. Significantly more titles classified as easy circulated to students attending the school with lower average reading scores, while significantly more titles classified as juvenile fiction circulated to students attending the school with higher average reading scores. The data indicated that reading ability is an influential factor in elementary school students' preferences for distinguished children's books. A list of 88 distinguished titles that circulated frequently and a 6-item bibliography are included in this report. (Author/ESR)