Prepare them for listening to sounds that letters make. Phonemic awareness is the ability to hear and identify sounds in spoken words. Children need to be able to do this, before learning to read print. Recite nursery rhymes and read rhyming books, listening for words that sound the same and talking about the sounds you hear.
Recognize letters by their name. Just as toddlers learn to recognize pictures and name them, young children can learn to recognize symbols and call them by their name. Point out letters in their everyday environment, and name them.
Explain to children that -- just like animals make different sounds -- letters can make different sounds when they are used in words. Have children relate each letter to a picture of an item that starts with that letter's sound. For example, "A" is for apple.
Put together letter sounds to form words. Show them how the sounds of "C", "A" and "T" can be blended to make the word "cat." Also teach them how to segment the sounds of a word into the letters that spell it. For example, when you say dog, the child should hear the sounds of "D", "O" and "G."
Explain digraphs, or two letters that make one sound when they are together. The sh- in ship is an example of a digraph. Encourage them to recognize those digraphs in words, so they are not sounding out each letter individually.