The "home literacy environment" (HLE) refers to the physical, interpersonal, and emotional/motivational factors in the home that have been found to be important for children's literacy development. In this paper, the emergence of HLE research, its conceptualizations, and the effects of HLE factors are reviewed with an emphasis on the relations between HLE and children's early literacy skills. Challenges faced by HLE researchers are also discussed with particular reference to three issues: privacy sensitivity, measure validity, and intervention fidelity. This paper also identifies directions for future research.