This paper is intended for early childhood caregivers--teachers in centers and those caring for children in homes. It is intended to help caregivers learn more about how children develop the ability to "use words" to communicate their thoughts and needs and ask questions, and to "understand language they hear" in conversations and in books. Why is this important? Because preschool children's understanding of the meaning of words and concepts and of other aspects of language such as sentence structure and listening comprehension, which they learn through their language interactions, are key foundational skills for later reading achievement. This booklet starts by summarizing the research on children's language development. It then presents themes about how to help children build their oral language skills during the preschool years. Teachers can use this resource to: (1) learn about the development of oral language skills in the preschool years; (2) understand the important role that oral language skills play in children's later reading and thinking skills, and (3) find out how to create an environment that helps children build strong oral language skills. A Quick Reference Guide to literacy terms is provided at the end of this booklet. [This report was written with Peggy Simon and Chris Dwyer. This report was based on the research findings from "Developing Early Literacy: Report of the National Early Literacy Panel" (2009) (ED504224).]