Interactive reading is the process by which two people will share a book or a passage, setting a specific pace, and placing emphasis on the theme, techniques, pictures, language, or specific topics of the book or story.
In the Elementary school, for example, interactive reading takes the form of small-group shared readings done with the teacher as it happens in guided reading. The teacher would ask for the students to make observations, point at pictures, and allow the kids to read at their own pace. More information for techniques of interactive reading are available on the link provided.
Interactive reading can take place in many other ways as well. For example, some students can understand and comprehend material a lot better when they hear it being read aloud to them. There are numerous programs available that students can use, via technology, that allow them to visually see the text (while being highlighted word for word) while it is being read to them.
In addition to this, there are many interactive reading games that can help develop the reading skills. Students can play with other students, both one on one and as a class.
Interactive reading helps students fully understand a text. Interactive reading is used during read alouds and guided reading groups. Before, during and after reading we are thinking and talking about the text. The students are posing questions, making predictions and creating visuals in their mind to better help them understand what they are reading.