The interactive theory of reading postulates that reading combines two types of processes: the top-down, or reader based, approach and the bottom-up, or text based, approach. This theory states that both these approaches interact to give the reader a hypothesis or prediction about the text. When the reader does not form an immediate prediction, he reads more closely.
This theory also postulates that the reader eventually settles upon an interpretation of a text using a combination of lower-level comprehension skills and a variety of higher-level comprehension skills. In other words, the interactive theory of reading claims that readers have an automatic recognition of words and ideas that tap into their lower-level comprehension processing but eventually bring in the logic and knowledge of the topic and the world that tap into their higher-level comprehension processing. This means readers must have the ability to use context clues to understand unfamiliar words as well as background knowledge on a topic in order to get the full effect of the text. The interactive theory of reading assumes that these processes work parallel with each other, and failure to use both processes results in the reader not having the ability to understand the written work fully.