This research reports on one area of a larger study in Western Canada examining the literacy activities of families from culturally diverse backgrounds. The research focused on parents' interactions with preschool children in storybook sharing and children's emergent reading development as measured by the "Test of Early Reading Ability-2 (TERA-2)". The sample consisted of 35 parents and children. Parents' and children's interactions in storybook sharing were videotaped and coded using a modified scale by Shapiro, Anderson, and Anderson (1997). Relationships were found between parents' and children's interactions in storybook reading and children's early literacy achievement. (Contains 1 figure and 2 tables.)