AS the morning mist floats up off San Francisco Bay, Edith and Clement Hurd sit on their sunwashed deck, high above the town of Mill Valley, chatting about the many children's books she has written and he has illustrated.
A favorite story concerns ''Goodnight Moon,'' the late Margaret Wise Brown's bedtime classic, which was illustrated by Clement Hurd. ''One lady told us her 18-month-old son put one foot in the book and tried to get his other one inside too,'' says Edith Thacher Hurd. ''He was trying to crawl inside the picture!''
'' 'Goodnight Moon' creates a mood,'' says Clement Hurd who, like his wife, has recently retired from the children's book business. ''It creates a world you can walk right into,'' his wife adds.
About a year and a half ago, the Hurds' son, Thacher (also a children's author-illustrator), and Thacher's wife, Olivia, decided that the art from ''Goodnight Moon'' was too special to keep inside a book. In June 1983, they printed up 1,000 copies of a ''Goodnight Moon'' poster and began marketing them under the name Peaceable Kingdom Press. Last December, they offered a second poster adapted from ''Runaway Bunny,'' also illustrated by Clement Hurd, and by Christmas they were literally swamped with rush requests from frantic bookstores.
Today, they sell 2,000 posters a month, and their list includes posters of Maurice Sendak's wild rumpus in ''Where the Wild Things Are,'' a piglet-in-the-forest scene from William Steig's ''The Amazing Bone,'' and a whimsical glimpse into the world of Van Allsburg's ''The Wreck of the Zephyr.''
Offering fine art posters to children - especially as an alternative to the gimmicks and glitz on the market today - is quite appealing to the Hurds. ''To take beautiful artwork out of a book and put it on the wall so that it visually becomes part of a day is very exciting,'' says Thacher. The only surprising thing is that no one thought of it before. ''Publishers have made posters for specific artists,'' says Edith Hurd, ''but no one we know is doing anything like this.''
Peaceable Kingdom Press, named after the Hurd family farm in Vermont, is run from a jam-packed room behind Thacher and Olivia's kitchen in their Berkeley, Calif., home. Though Clement Hurd was very involved in the business in its inception, he leaves running it to his son and daughter-in-law, restricting his role to adviser. ''I am chairman of the board,'' he says with a sly smile.
The success of Peaceable Kingdom Press coincides with a current explosion of interest in children's literature. Over 2,000 children's books are published each year, and the authors and illustrators are being recognized as masters in their own right. It is a far cry from the days when, as Edith Hurd recalls, Bennett Cerf introduced the brilliant and dynamic Margaret Wise Brown as a writer of ''baby books.''
Both Edith and Clement Hurd, who between them have written and illustrated more than 100 books, were first published in 1938, the year they were married. ''When Margaret Wise Brown tapped me as a prospective illustrator to make
books, I jumped with joy,'' says Mr. Hurd, who studied art under Fernand Leger (father of the Effort moderne movement) in Paris in the early '30s. His first book, ''Bumble Bugs and Elephants,'' which featured simple, boldly colored illustrations, was written by Margaret Wise Brown. The following year, he illustrated Gertrude Stein's ''The World Is Round.'' ''It was never successful commercially,'' he says, ''but it was referred to as a classic, as a landmark in the children's book field.''
Edith Hurd wrote her first book, ''Hurry, Hurry,'' while a student at New York's progressive Bank Street School, where she studied early childhood education after her graduation from Radcliffe College. Her guiding spirit was the head of the school's Writing Laboratory, Lucy Sprague Mitchell, an outspoken advocate of the then-revolutionary concept of gearing children's stories to youngsters' simple interests and vocabularies. Another one of Mitchell's students was Margaret Wise Brown, who brought Mrs. Hurd's work to the attention of William R. Scott, a bright and experimental publisher in New York.
Before long, a latter-day ''Bloomsbury group'' began to coalesce. ''We thought we were beginning a whole new movement in children's books,'' says Mrs. Hurd. ''None of us made the decision to go into children's books. We just worked on projects together.''
It was easy at first, but as the individuals became more successful, collaboration, especially with Margaret Wise Brown - whom both Hurds adored - became tricky. ''One or the other of us would be working with her,'' recalls Mrs. Hurd, ''and the other would have to act as peacemaker.''
The Hurds began working together shortly after their marriage, collaborating on over 75 children's books. A frequent topic was nature, and many of their books drew on experiences at their Vermont farm. One of Mrs. Hurd's favorites is a six-book series on how animal families rear their young, which she hoped would help children discuss their own changing family life styles. ''We once had a beaver family on our pond,'' Mr. Hurd recalls as his wife brings out ''The Mother Beaver.'' ''It eventually flooded the road.''
Another of their favorites is ''The Day the Sun Danced,'' an evocative ode to spring, which was one of the first books to feature Clement Hurd's brilliant woodcut and wash technique.
''It was very exciting when I was a child,'' says Thacher Hurd in his sunny Berkeley living room. ''I thought my parents were the most famous people in the world - except for Maurice Sendak.''
Like his father, Thacher started out in the fine arts, but after art school, he recalls, ''I sat down to be an artist and was actually bored. I was drawn to the idea of telling stories in pictures.'' He began writing in 1974 and has since published seven books. ''I owe a tremendous debt to my parents,'' Thacher says. ''Without ever forcing me, they taught me a great deal.''
Thacher's first books were gentle tales of soft feelings. Since then, his voice has grown progressively louder. ''Mystery on the Docks,'' a feature on PBS's ''Reading Rainbow'' last summer, clearly takes its lead from Humphrey Bogart films, and his latest book, ''Mama Don't Allow,'' based on the American folk song, is an exuberant and jazzy romp by a saxophone-playing possum and his ragtag Swamp Band.
''In the beginning,'' says Thacher, ''Peaceable Kingdom Press took over a lot of our time. . . .'' ''And our dining room and our bedroom and our garage,'' adds Olivia, who now spends many of her mornings in libraries searching for potential additions to their list.
''I think the best art today is children's art,'' says Olivia, a fine artist whose hand-stencils decorate their home. ''In many children's books, paintings deal with feelings. When art can communicate something on a feeling level, it's very satisfying.''
''Good children's art has soul,'' Thacher agrees. Peaceable Kingdom Press distinguishes ''coffeetable books,'' he says, from books that clearly appeal to children. ''Illustrations that children love have a lot of life to them.''
Asked if his works will one day join the select ranks of Peaceable Kingdom Press, Thacher glances impishly at his wife and says, ''Oh, I don't know, I'd have to apply to the board.''