This paper reports some findings from the first three years of a longitudinal study designed to follow students' growth in literacy from the earliest years at school. A feature of the study was the use of quality children's literature, in the form of picture story books. These texts were the basis of instruments designed to investigate students' developing comprehension, their understanding and knowledge of narrative texts, and their skills in recognising, explaining and making connections with the themes and ideas in the texts. The selection of texts appropriate for these purposes has raised many points of interest, such as the complexity of themes and ideas that children can access from such texts, and the power of the visual images that play a central role in picture story books.