There is a lot of confusion when it comes to these two types of Children’s Books which is understandable since, in practice, there can be quite a bit of overlap.
By definition, the two differ in that a Picture Book tells a story almost exclusively with pictures. A Story Book, on the other hand, relies on the prose and should stand alone without images. Illustrations in a Story Book are not essential to the story, they serve a more as a more decorative element.
This is a key factor in the relationship between writer and illustrator for it determines how reliant the author is on the illustrations as a means of visual storytelling. With Picture Books, the selection of images as well as the transitions is tantamount to the narrative. Although the illustrations in a Story Book should also be carefully selected to illustrate key actions and characters, the transition from one illustration to the next does not have to create the narrative.