Young children’s use of digital devices is increasing as we progress through the 21st century and handheld and mobile devices, such as smartphones and tablets, have become increasingly available. While older children using tablets to read has been more broadly investigated, less is known about the impacts of digital reading on children at the stage of literacy acquisition. An analytical review was conducted on the effects of interactive e-book interventions for young children’s literacy development when compared to (a) listening to print books, (b) regular school programs, and (c) reading non-enhanced and non-interactive e-books. A significant additional beneficial effect of e-book interventions was found for phonological awareness and vocabulary learning based on data from 1138 children in 14 randomized controlled trial (RCT) studies. When e-books are properly selected and used, children develop literacy skills equally well and sometimes better than with print books. Additionally, e-book interventions outperformed the regular school program in the development of literacy skills. Similarly, enhanced e-book conditions revealed benefits over the non-enhanced e-book interventions in literacy skill acquisition. The impact of these findings related to health issues, e-book design, disadvantaged populations, and adult-led e-book sharing is discussed.