SUMMARY This paper reports on one aspect of a collaborative early childhood literacy research project in New South Wales, Australia, where two government departments and three universities investigated the language and literacy environments of preschool age children at home and in settings. Researchers observed and rated the environments of 80 early childhood settings, followed by interviews with staff members working in the setting as well as focus group discussions with representative family members. The project focused on families and settings of children from Aboriginal, bilingual and low socio-economic backgrounds. In settings with strong levels of congruence between family and staff perspectives on early literacies, both stakeholders shared understandings of cultural and family practices, in comparison to those settings where shared understandings about diverse literacies were not present.