How do I combine text and images in a children’s book for Kindle?

You have a few options depending upon the type of children's book you are making. The easiest way is to follow Jay's model…he has quite a few books in the “Fart Books” (and now the family avengers) series which is basically a chapter heading followed by an image followed by the text for that chapter (or the text and then the image) which we then use WordCrusher or the Book Format Rocket to make the actual kindle book out of the word document. Use the Look Inside feature here to see exactly how it's formatted.

If you want the text to overlay the images and create a fully illustrated children's book, then use the Kindle Kids Book Creator to create your books.