This research aimed at designing a picture book which is based on local folktales to support children’s early literacy. With observation and one group pre-test post-test experimental design, the main field test was carried out to a total of 120 preschool children aged 5 and 6 years old. Of the total, 43 children were chosen as the control group, while the other 77 children were as the experimental group. An independent sample t-test was used to determine the score difference between the two groups. The findings show that there is an improvement in reading readiness among the experimental group. Therefore, it can be concluded that the use of the local folktale picture book developed in this study can give a positive impact on children’s early reading development. The implication of this study is expected to shed light on the importance of local culture in children language development.