This study explores the relationship between English and Japanese in bilingual children. The Bilingual Verbal Ability Tests (BVATs) were administered to 40 children of Japanese heritage and their mothers residing in the San Francisco Bay Area. All the subjects were either enrolled in bilingual programs in public elementary schools or attending Japanese language courses on weekends. The tests were administered to measure the children's English language proficiency and bilingual verbal ability (verbal cognitive ability in English and Japanese combined), and to predict the children's academic progress. Both qualitative and quantitative methods were used. The study found that it is essential for bilingual children to raise the level of their first language ability to such an extent that their literacy skills in Japanese and English will be able to produce mutually accelerated progress effects. The study also revealed that Japanese was the dominant language for those parents who grew up in Japan, whereas English was dominant for many of their children. Specifically, bilingual children used Japanese mainly in interacting with their parents, while they tended to prefer speaking English in all other settings, such as at school and interacting with siblings. Overall, it was found that Japanese families demonstrate a successful case of balanced bilingualism. Unlike most other immigrant children, where over time English comes to displace the family's first language in children, families of Japanese heritage have been successful in promoting lasting bilingualism. (Contains 20 references.) (KFT)