A study evaluated the IBM Principles of Adult Literacy (PALS) program in 1988-89. Three adult education centers in Georgia (two with PALS and one without) were studied to determine whether, for adult nonreaders, the PALS program produced gains in reading equal to or greater than those produced by a traditional noncomputerized program. In addition to reading, students' progress in writing and student and teacher attitudes toward the PALS program were evaluated by means of assessment, observations, and interviews collected during an 8-month period. The study found that adults in the PALS program performed as well as adults in a traditional noncomputerized literacy program, although neither group as a whole demonstrated significant progress on the reading or writing measures. There was a significantly lower dropout rate, but no difference in the attendance rate for the PALS program than for the traditional program. Student satisfaction with the PALS program was high, their attitudes toward the program were good, and they felt they improved their reading. Teachers were generally favorable toward the PALS program although they felt the need to use it in conjunction with other teaching methods and materials. Strengths of the PALS program centered around the use of computers and the inclusion of touch typing skills in the instruction. Weaknesses of the PALS program included the difficulty teachers had getting the writing program started and problems with typing for the older students. The study concluded that the PALS program may be a beneficial addition to a literacy program, but it is not a panacea for adult literacy education. (KC)