With more children spending the greater part of their waking hours in preschool settings today than they did years ago, teachers play an even more critical role in providing daily literacy experiences that many children of earlier generations received at home. The article focuses on the critical role that preschool teachers play in supporting children's early literacy development and presents an instructional framework to help guide early literacy teaching. The framework is based on Vygotsky's learning theory, which emphasizes the nature and importance of social interactions in instruction, particularly between adult and child. We present activity‐embedded assessments that preschool teachers can use to observe and document children's emerging literacy concepts and skills, and describe key teaching actions that scaffold learning of new concepts. In closing, we offer five principles to guide preschool teachers in planning and implementing appropriate activities to promote young children's literacy development. Sample documentation forms are included in the appendices.