Commercial phonics programmes (e.g. Jolly Phonics and Letterland) are becoming widely used in the early years of school. These programmes claim to use a systematic explicit approach, considered as the preferred method of phonics instruction for teaching alphabetic code-breaking skills in Australia and the UK in the first years of school (Department of Education, Science and Training, 2005; Rose, 2006). However, little is known about the extent to which they are being used in prior-to-school settings, and the reasons behind decisions to use them. This study surveyed 283 early childhood staff in Sydney, Australia and found that commercial phonics programmes were being used in 36% of the early childhood settings surveyed. Staff with early childhood university qualifications and staff working in not-for-profit service types were less likely to use a commercial phonics programme than staff without university qualifications and staff working in for-profit services. Staff with less than 10 years' experience were also more likely to use a commercial phonics programme. The rationale behind decisions determining whether or not staff used the programmes ranged from pragmatic reasons, such as parent pressure or higher management decisions, to pedagogical reasons, such as teacher beliefs about how children learn to read and write. The practices staff engage in to teach phonics are explored.