Pre-Kindergarten (4 years old)
Pre-Kindergarten aged children (between 3-5 years old) will begin to understand and focus on the sounds within words. They start to comprehend rhymes and the syllables with in words. They can even begin to recognize the the similarity between the sound of two different words (source).
Phonological awareness is rapidly developing in Pre-K aged children. Phonological awareness can be described as your child's awareness and ability to manipulate the sounds and individual letters within words. This awareness can improve your child's literacy advancement and helps to improve reading readiness.
Children this age may begin to recognize familiar words such as street signs or even familiar store signs or logos. They start to realize that the whole world is full of letters and words and they develop an understanding of the familiar letters and words they see in their every day lives (such as their own names, etc). A child this age may begin to pretend to read story books as they start to understand the structure of books. Your Pre-Kindergartener will also develop skills in understanding story structure (beginning, middle, end) (source).