This article reviews extant literature with the purpose of identifying factors that affect the potential efficacy of electronic books to support literacy development during early childhood. Selection criteria include experimental, quasi-experimental, and observational studies from peer-reviewed journals from 2000 to 2013 with a target population of 3-7 year olds. Results established the following factors as relevant to potential literacy outcomes: interactive features, quality assessment, repetition, and adult interaction. Each factor is discussed in its relationship to literacy skills in order to identify optimal conditions for literacy growth. Findings in this review are pertinent to parents, educators, legislators, and software developers who are making software decisions that will impact early childhood students at home or in school. Future research and implications are considered.