This report gives a history of the 1979-80 segment of a continuing project that is designed to provide a theoretically based description of children's transition from prereading to reading, along with tools that teachers may use to assess children's emerging literacy abilities. The first chapter provides an introduction to the project, while the second chapter examines the transition from prereading to reading and discusses supports and constraints of written texts, the reading process, the discovery of relevant aspects of reading, the emergence of aspects of reading, differences in reading and writing, the nature of written texts, written texts and oral language, modes and how they differ, knowledge about written language, and sequence issues and reading acquisition. The third chapter presents the goals for two studies, one dealing with general knowledge about written language and the other analyzing topic effects in real and make-believe stories. The fourth chapter contains a description of the methods and procedures used in the two studies and the results, presented topically, by and across studies, are presented in chapter five. The final chapter summarizes and discusses the results. An examiner's guide is appended. (HOD)