The Magic Treehouse series was suggested to me by a friend as a good introduction to chapter books. We started borrowing them from the library a couple months ago, and we have not been disappointed! Each book has an illustration every 3 or 4 pages, teaches the child about a new place or time, and uses fairly simple language. John (5) has latched right on to them, and Daniel (3) will sometimes listen in but can't quite hang with them yet. What books do your kids like to read?
Photo courtesy of Yard Sale Mommy