The purpose of this Digest is to provide information for family child care providers regarding children's early literacy development. A definition and the characteristics of family child care are discussed in the first part of this Digest. The second half focuses on research-based strategies and recommendations that help support early literacy development for children enrolled in family child care settings: children acquire the forms and function of literacy through interacting with more capable peers and adults; children learn best from meaningful and functional activities; children learn to be literate in a literacy-rich environment, where diverse, real-life materials and activities meet children's different needs and interests; and providers should use public facilities and collaborate with local higher education institutes. (Contains 20 references.) (RS)