A study investigated the literary experiences and understanding of elementary school students by focusing on the literature children encounter in school and at home, literary instruction, and the differences between good and poor readers. Teachers and researchers traced the reading habits of eight second-grade students from two classrooms from November 1988 to June 1989. Results indicated that: (1) the literary experiences of these children were extensive, and occurred with regularity in their homes and at school; (2) both teachers (one who used only trade books for her reading program, and one who used a combination of a basal reading program, guided reading of children's trade books, and independent reading of trade books) placed a strong emphasis on literature and had many similar routines for engaging children with literature; and (3) poor readers actually read more than many of the better readers. Results further indicated that what separated the eight students with respect to their engagement in classroom literacy activities was not primarily their reading ability, but rather a combination of gender factors, reading ability factors, and variations in individual student behaviors. Results suggest that although traditional methods of defining and distinguishing between better and poorer readers reliably characterize their reading abilities within the framework of a traditional reading skills curriculum, these methods are less useful in characterizing children as readers of literature. (Nineteen tables of data and 7 figures are included; 38 references and 1 appendix are attached.) (PRA)