|Abstract:||Advertising does not stand alone, but rather naturally hides in editorial content or entertainment programs. For example, child-friendly media characters and related merchandise have become inseparable from advertising since the mid-twentieth century. Recently, media characters are the entertaining tools hidden in newer forms of advertising such as advertainment. However, due to their limited capacity and critical thinking skills, young children, particularly preschool-aged children, may be persuaded with such advertainment content. Thus, children are strongly encouraged to learn how advertisers use those media characters to sell more related merchandise across multiple media platforms (i.e., media literacy). Children need adults’ guidance about how to deconstruct and understand persuasion attempts from media content. Parents are one of the consumer socializing agents who guide children’s media habits and help them to acquire consumer knowledge. Despite the importance of parents’ roles for children’s media literacy, there is a lack of research regarding parental media literacy associated with parental mediation practice, particularly in the context of advertainment featuring popular media characters. Thus, my dissertation explores the influence of parental media literacy and parent perceptions of media characters on parental mediation of advertainment content. In the first study, one-on-one in-depth interviews were conducted with 35 parents (22 mothers and 13 fathers) to examine their understanding of advertainment and their perceptions of media characters. Parental mediation practice related to advertainment was also explored. Findings revealed that parents are likely to recognize the selling intent of the sponsored unboxing videos and general television advertisements, but not advergames. They were also likely to combine active mediation, restrictive mediation, and co-viewing. The first study offers rich insights about each parent, but no clear patterns emerged related to consistent relationships between parental media literacy and parental mediation. Also, the study also showed limited evidence related to whether positive or negative characters and type of advertainment (entertaining sponsored video vs. advergame) affect the way of parents mediate advertainment containing media characters. Thus, in the second study, with a between subjects experimental design (online experimental survey with 198 parents), I examined how type of media character (positive, negative) and type of advertainment content (advergame, unboxing video) individually and interactively influence parental mediation. In addition, the influence of parental media literacy on active mediation was also explored through the online experiment. Results revealed that the type of media character (negative), parental media literacy and parents’ educational level influenced parental mediation practice. Media characters which conveyed more negative qualities were likely to increase parental active mediation. Also, parental media literacy and parents’ educational level were likely to be a significant predictor of all three types of parental mediation (active mediation, restrictive mediation, and coviewing). As a whole, findings across both studies suggest that parental media literacy and educational level significantly influence the way that parents mediate advertainment content containing licensed media characters or related merchandise. To have various conversations about media and advertising proactively with children, scholars may need attention on how we can enhance parental media literacy. This dissertation offers a few implications for advertising research and advertainment based on the consumer socialization framework. Suggestions and guidelines for developing media education programs and policy making about advertainment content are also presented.