This annual report reviews challenges and benefits of family literacy programs and presents a summary of outcomes for 2004-2005. Family literacy comprises four components that build on each other to improve parents' and children's achievements: (1) Adult education, including adult basic and secondary education and ELL; (2) Parent education; (3) Early childhood education; and (4) Parent and child interactive language and literacy activities. In 2004-2005, the Bureau of Adult Basic and Literacy Education administered a $13 million family literacy program, including nearly $7.5 million in federal Even Start funds and more than $5.5 million in state funds. These funds supported 58 programs in all 67 counties of the state. Services were provided to 193 of Pennsylvania's 501 school districts and two charter schools. In 2004-2005, Pennsylvania enrolled 2,912 families, consisting of 3,000 adults and 3,989 children. (Contains 3 figures and 1 table.)