Accuracy and fluency of word identification is essential component of reading comprehension, which is a consensus among researchers from variable theoretical perspectives, including simple view of reading, information processing, and reading development, as well as the core deficit of and special education for individuals with dyslexia. The purposes of this literacy review was conducted to examine the findings and limitations of studies on Chinese character and vocabulary instruction published in academic journals from 1997 to 2008, and to offer some suggestions for future research on reading instruction, including to examine effects on word identification caused by expanding the age range of reading instruction participants, exploring the impact of text accommodation, free voluntary reading on word learning, and comparing the effects of different vocabulary instruction approaches.