A study focused on teachers' developing knowledge about their work, particularly the thinking of eight elementary school teachers from a racially mixed San Francisco Bay Area school district about the use of literature contracts in the classroom. The study examined ways in which teachers' prior beliefs influence their use of a new teaching strategy (assimilation) and the ways teachers' use of the new strategy impacts their belief system (accommodation). In a series of interviews, two of the teachers discussed their initial use of literature contracts in reading instruction. A developmental stage model was designed to aid in describing the development of educators' thinking in terms of assimilations and accommodations and the way teachers' understandings of teaching evolve from relatively simple to more complex. (Interview questions are attached.) (RS)