Culturally Relevant Pedagogy and use of diverse picturebooks to support reading development and social-emotional skills are gaining acceptance and broader use. With this shift, new measures of efficacy are needed to confirm, bolster, and source new policies and strategies for family and classroom literacy practices. To this end, the Reading Builds Empathy (RBE) literacy study sought to develop and pilot a new instrument that uses picturebook reading as a way to understand empathy development. The RBE study participants included 21 parent-child dyads (N = 42) and piloted a tool that was created to measure children's empathy development for children ages six-eight. The tool includes collecting parent reports of children's at-home literacy practices and engagement with picturebooks as well as parents' perspectives on their child's empathy development. The tool also includes a researcher-administered tool to directly measure children's empathy development in a developmentally appropriate format across three domains: affective, cognitive, and ethnocultural empathy. This paper describes the process for instrument development, initial pilot data, considerations for changes to the instrument, and ideas for how the instrument can be used in future intervention studies.