Practice the alphabet with your child until she has a good understanding and is able to recognize letters and name them. Now is the time to introduce the difference between the name of the letter and the sound, or sounds, it makes. Repetition is key here. Work with your child on this frequently, but for short amounts of time so that she finds it enjoyable.
Work with words that are three letters or less in length. Phonics flashcards come in handy here. Remember to emphasize the different sounds that vowels can make and that each word is connected with a picture. For example, when teaching the word cat, emphasize that the image on the flashcard is a picture of a cat. This will keep the child from sight-reading.
Add a new letter to your repertoire everyday, working through the vowels first and then the consonants. Progress through words with three letters to words with four letters and so on. It is recommended to work on phonics with your child when he wakes up in the morning and before bed, though you may find a different schedule works better for you both.
Have your child read age-appropriate books. Make sure that these books have words that the child is not familiar with. This teaches him to use the phonics skills he has developed and to sound out the word. Also, be sure to vary the books. This keeps things interesting for the child and ensures he is not reading from memory.