There is tremendous variation in the use of American English by major geographic regions, as well as within these regions or cities, and by cultural background. The variety of English spoken by many African American people in the United States is called African American English (AAE). AAE affects early literacy skills in ways that may require differentiated classroom instruction that focuses on integrating this important language variety into both teaching and learning. The purpose of this paper is to: (1) present the characteristics of AAE and its relationship to the development of reading; (2) outline the impact of AAE on foundational language and reading skills, especially phonemic and phonological awareness; and, (3) provide some guidance for addressing variation in the classroom when teaching phonemic and phonological awareness, while simultaneously affirming African American children's identitities by acknowledging and celebrating the language strengths they bring to the classroom.