Because early reading has proven to be such a difficult educational problem to address, it is reasonable to expect future solutions to provide more rigorous theoretical and empirical justification for their usefulness than has often been required in the past. The need for better solutions should occasion a more thorough examination of all educational tools currently used in early reading classrooms, including computer technology. While computer programs for early education are popular and widespread in today's educational environments, these programs should be implemented as part of a school curriculum, a school readiness program, or a home-based supplement to the school curriculum, only if their relative strengths (such as interactivity and adaptability) can be utilized to improve children's learning, and only if their content is held to similar, or higher, standards than more traditional instructional methods. The solution under examination here is the Waterford Reading curriculum (formerly Waterford Early Reading Program or WERP), a computer-adaptive software package designed specifically to teach pre-literacy and early literacy skills to beginning readers. This document outlines both the theoretical framework for Waterford Reading and the results from an initial battery of empirical testing; because we believe the Waterford software to represent an immediate and sizable opportunity for effecting change in both the classroom and the home, our aim is to provide a rationale for its further testing, funding, and implementation. (author abstract)