This paper is discussing about phonological awareness and the possibilities of its encouraging in earl and preschool period. Phonological awareness means the ability of a child to recognize and manipulate parts of the words. In earl and preschool period a child acquires basic attainments, skills and experience, and in particular he develops his language and speech development. A child in this period acquire pre-reading skills and a precondition of their development is a well developed phonological awareness. It also acts in relation to the development od early literacy in which children gradually acquire reading and writing skills. The development of phonological awareness takes place according to a logical sequence that moves from larger units to a higher level of sensitivity to the existence of smaller units. For this reason, it is important to encourage phonological awareness from the earliest age by integrating it in everyday activities. These activities should be designed carefully by the adult (a parent, a preschool teacher, a teacher etc) and adapted to a child by being implemented in appropriate manner. It is important to integrate these activities into child's everyday activities and not to carry them out isolated from other activities. The aim of this paper is to give a theoretical overview of phonological awareness with a special emphasis on the possibilities of its encouraging. It also problematizes terminological definition of this term, considers phonological awareness in the context of early literacy and states what are the possibilities of its encouragement. Besides, it describes the importance of phonological awareness for reading and writing skills development and importance of reading as a stimulus for the development of phonological awareness as well.