A study investigated the nature and extent of adult illiteracy and the characteristics of the less literate populations in Philadelphia. Data were collected through 2,197 telephone interviews and 607 personal interviews. The personal interviews involved use of a modified version of the instrument developed by the National Assessment of Educational Progress (NAEP) for its young adult literacy project. Among the findings were that: (1) probably no more than 12 percent of Philadelphians are functionally illiterate; (2) another 21 percent are performing at a rather low level--below ninth grade functioning; (3) since these poor basic skills belonged to persons in groups that had high unemployment and low levels of income, their lack of literacy skills probably has affected the ability of almost one-third of Philadelphia's citizens to be productive; (4) lower literate persons tend to be older, members of minority groups, high school dropouts, and unemployed, and earn less than $10,000 annually; (5) lower literate persons often have poor opinions of their schooling and themselves as learners, although they have relatively high aspirations for further education; (6) lower literate persons have highly developed coping skills for reducing or circumventing the problem posed by reading and writing tasks; (7) many in this group read newspapers, magazines, and books, although with less frequency and fluency than more literate people; (8) many see little reason to upgrade their literacy skills because of their adaptive abilities; (9) lower literate persons know where to go to seek help with basic skills, but few choose to enroll and stay in the programs. (34 references) (CML)