Baaa, by David Macaulay (Houghton Mifflin, $12.95; paperback, $4.95; all ages). David Macaulay moves out of the past (Castle, Cathedral, Pyramid) and into the future -- but not that of the fanciful Motel of the Mysteries. This time Macaulay tells a grimmer tale, a variant on Thurber's The Last Flower, Orwell's Animal Farm and Clifford Simak's City. Mankind has destroyed itself, and only sheep survive. The animals have been scavenging recklessly through the deserted cities until one fateful day, "while gamboling across a family room, a young lamb accidentally turned on a television. When it began to glow, everyone stared and stared." From this inauspicious start, the sheep begin to rebuild civilization, inspired -- alas -- by the example of mankind. Soon there are weather sheep, sheep political leaders, traffic problems; food shortages lead to the development of Baaa, a cheap and plentiful nutritional substitute. But by then it is already too late to prevent a gradual decline of civlization and, like man, the sheep eventually die out.

This is clearly a book with a message -- don't repeat the mistakes about food, population and government that the sheep make -- but Macaulay's didacticism has a whimsical rather than preacherly character. The drawings are super: for all their mighty achievements the sheep always look like really dumb animals, perpetually startled by the world about them, mildly ridiculous in their human clothing. Macaulay's captions possess a deadpan rightness: on one page he shows a tapestry of numbers -- a huge graph -- proving that the starving animals have enough to eat. The sheep leaders on a balustrade repeat, a la Newspeak or Newsweek, that "Everything is just fine" and "See the chart." The crowd below holds placards. But there is, of course, not enough: The hungry sheep look up and are not fed.

This is an odd album, one that will appeal to thoughtful children even as it worries their parents. I liked the book, especially for its fatalistic character -- Macaulay offers the sheep no hope of altering their destiny -- but prospective buyers would do well to read it before automatically buying it.

The Read-Aloud Handbook, by Jim Trelease (Penguin, $6.95). In this new edition of The Read-Aloud Handbook Jim Trelease has enriched the original text, taking into account such matters as VCRs, home computers, and the Yuppie obsession with Superbabies. His general advice, of course, remains pretty much the same ("The most common mistake in reading aloud . . . is reading too fast") and families with the older edition don't need to rush out for this one. What has grown though is the "Read-Along Treasury," an annotated list of books updated to include titles as recently published as 1984. Jim Trelease's own favorite? Roald Dahl's James and the Giant Peach. Any household with children should know about The Read-Aloud Handbook and take its counsel to heart.

Handle With Care: Frightening Stories, chosen by Joan Kahn (Greenwillow, $10.25; ages 12-up). Except for Ellery Queen, no one has been a more important editor of mystery and suspense stories than Joan Kahn. For decades her imprint on a book has been a guarantee of fine reading -- and this collection for children is no exception. Here are such classic shockers as Jerome K. Jerome's early robot story, "The Dancing Master," Isak Dinesen's gothic charmer, "The Sailor-Boy's Tale," a cozy and shivery M. R. James classic "Lost Hearts." Also included are work by Agatha Christie, John Dickson Carr, Michael Gilbert, Ellery Queen and several others. Most of the stories are short, and none is as violent or bloody as much of what one finds on television. But nearly all should offer youngsters that lovely frisson that makes for half the joy of ghost stories told at twilight. Older children looking for sharper thrills should go on to the classic Wise and Fraser anthology, Great Tales of Terror and the Supernatural.

Beyond the Looking Glass: Extraordinary Works of Fairy Tale and Fantasy, edited by Jonathan Cott (The Overlook Press, $22.50; ages 8-up). Adults who buy books for children like to concentrate on sure things -- classic picture albums, familiar authors like Kenneth Grahame or Maurice Sendak, Newbery and Caldecott winners. No sense, after all, in spending hard-earned money on books that might not be read or liked. As a result, wonderful stories that are just a little odd or or audacious or old can be forgotten. When Jonathan Cott first gathered these Victorian fairy tales together he performed a work of rescue, one that allowed readers to rediscover George MacDonald, John Ruskin ("The King of the Golden River" with Richard Doyle's illustrations), and marvelous pieces by Mary de Morgan and Maggie Browne. Now Overlook has rescued Cott's collection, returning it to print -- and, one hopes, the hands of avid readers young and old. I wish the margins of the new edition were a bit more spacious (as they were in the original), but that is my only complaint about a first-rate anthology, one that now includes a provocative introduction by Leslie Fiedler.

Universe, by Heather Couper and David Pelham (Random House, $19.95; ages 8-12). Like most pop- up books, this one dazzles with its paper engineering while leaving the reader (viewer?) starved for real information. The theory, I suppose, is that the youngster, enthralled by depictions of the Big Bang, the Solar System, and the birth and death of stars, will scarcely notice the itsy-bitsy, teeny-weeny text. After all, the implied logic seems to go, kids with a serious interest in galactic matters will turn to Isaac Asimov for factual guidance. So, for all its ingenuity, I can't help but view this pop-up "history of the universe" as a non-book, showy, unsatisfying, and just waiting to be torn, spindled and mutilated.