I must agree with GoodLady and duffsmom, READ, READ, and READ some more. Start from when they hit this world and don't stop. It doesn't matter what you read, backs of cereal packets, labels, anything as long as you are demonstrating this skill. (I still enjoy my Mother reading news articles or extracts to me.) Children will expect to be read to as they become congnizant of the process so any time, day or night, find something to read. Even better, create books yourself and you'll enjoy the process even more. When you read these or any other book give it some OOOMPH. Change you voice for characters, and use an onomatopoeic approach i.e. if a giant is making a thud when walking, make your voice sound like a THUD. Remember, reading is fun and you want it to become a life long love of your children or grandchildren.
Once children are sitting beside you listening to the words and looking at the pictures, their curiosity will be ignited about the words. Make the reading process a time of enjoyment and not, you must sit and listen time, because the latter will turn them off as quickly as the first style will turn them onto reading. Point to the words as you read so they begin to recognise the words and learn the left to right sequence. Have them draw the characters, doesn't matter if it's a blob, but ask them what it is and write the name of the character on the drawing. Associating words with what they are doing helps them develop a vocabulary, and this in the long run assists them to develop their reading skills.