In this paper we discuss three areas of development that have been shown to be fundamental to the acquisition of literacy. These areas are experience with stories and book reading, concepts of print, and phonological awareness. In each area, we review the research comparing the development of these skills by bilingual and monolingual children. In all three areas, research has been contradictory regarding whether or not bilingual children differ from their monolingual peers. We attempt to reconcile some of these diverse findings by identifying more specifically the effects that bilingualism has on children's early literacy development.