Since Node.js v0.12 and as of Node.js v4.0.0, there is a stable readline core module. Here's the easiest way to read lines from a file, without any external modules:

const fs = require('fs');
const readline = require('readline');

async function processLineByLine() {
  const fileStream = fs.createReadStream('input.txt');

  const rl = readline.createInterface({
    input: fileStream,
    crlfDelay: Infinity
  });
  // Note: we use the crlfDelay option to recognize all instances of CR LF
  // ('\r\n') in input.txt as a single line break.

  for await (const line of rl) {
    // Each line in input.txt will be successively available here as `line`.
    console.log(`Line from file: ${line}`);
  }
}

processLineByLine();

Or alternatively:

var lineReader = require('readline').createInterface({
  input: require('fs').createReadStream('file.in')
});

lineReader.on('line', function (line) {
  console.log('Line from file:', line);
});

lineReader.on('close', function () {
    console.log('all done, son');
});

The last line is read correctly (as of Node v0.12 or later), even if there is no final \n.

UPDATE: this example has been added to Node's API official documentation.

Use path.join(__dirname, '/start.html');

var fs = require('fs'),
    path = require('path'),    
    filePath = path.join(__dirname, 'start.html');

fs.readFile(filePath, {encoding: 'utf-8'}, function(err,data){
    if (!err) {
        console.log('received data: ' + data);
        response.writeHead(200, {'Content-Type': 'text/html'});
        response.write(data);
        response.end();
    } else {
        console.log(err);
    }
});

Thanks to dc5.