Australian Aboriginal children, in general, lag behind their mainstream peers in measures of literacy. This article discusses some of the complex and interconnected factors that impact Aboriginal children's early language and literacy development. Poor health and historically negative socio-political factors are known influences on Aboriginal children's participation and achievement in education. Cultural and dialectal differences are also considered in this article for the effect these variables may have on children's learning, in terms of both the child's ability to code-shift between dialects and the development of the educator-child relationship. The importance of this relationship is discussed, partly because of the valuable communicative interactions that are involved. These educator-child interactions allow children an opportunity to extend their oral language skills, which are essential precursors to literacy development. This discussion concludes with some suggestions for further research.