Noting that the popular press and other media have purveyed much information and misinformation about the status of adult literacy in the United States, this paper focuses upon what is known about literacy levels and gives special attention to changes in literacy demands and to what is currently being done to meet those demands. The first section of the paper ("What Is Literacy and Who Is Literate?") examines several historical definitions of literacy before looking at national surveys of literacy abilities. The second section ("Changes in Literacy Patterns and Demands") explores changing demands, habits, and abilities of the population since the 1700s; while the third section ("Adult Literacy and Basic Education") summarizes demographic information about who receives basic education, what is known about the cognitive characteristics of adult illiterates, and how much time is required for learning gains. The fourth section ("Effective Literacy Programs and the Problem of Transfer") reviews research on effective programs and studies of the extremely limited transfer of newly learned literacy abilities. The final section of the paper identifies trends in the research, some problem areas and recommendations for future study. (A six-page reference list is appended.) (Author/FL)