Research on early literacy development highlights the crucial role of the literacy environment in promoting literacy skills. This includes factors like home and school settings children are exposed to their home-literacy environment (HLE) and school-literacy environment (SLE). The present study investigated the correlation between literacy environment and early literacy skills in Malayalam-speaking Indian children. One hundred typically developing children aged 5:0 to 5:11 years participated. A comprehensive content-validated 169-item instrument was developed in Malayalam to assess early literacy skills with domains such as listening skills, phonological skills, oral language, print awareness, pre-writing, and pre-mathematical skills. Additionally, two questionnaires were designed to investigate the impact of home and school literacy environments on literacy skills, which were completed by parents and teachers. The developed material was administered, and samples were analysed. Results of the study indicated the highest mean percentage score for pre-writing skills (97%) and the lowest mean percentage score for phonological skills (50.6%). The findings also revealed a correlation between literacy environment and early literacy skills, but the level of correlation varied. This study highlights the importance of active and engaging literacy practices at home and school to support the foundational literacy development of young children.
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