A North Carolina study examined the problem of adult illiteracy in Spring 1988. Secondary data for the service areas of eight community colleges chosen as study sites indicated that approximately 25 percent of North Carolinans aged 25 years and older had completed less than the ninth grade in 1980 and the majority of them were unemployed. A review of community colleges' long-range plans for literacy service provision showed that four programs provided literacy education in community colleges; the annual retention rate was 33 percent; and new students accounted for 67 percent of students. Surveys of literacy service providers found that: (1) improvement was needed in publicity, networking, and student diagnosis; (2) instructors focused on basic skills instruction; (3) problems included low motivation and self-esteem; and (4) students quit school due to work or lack of interest. State directors of adult literacy programs in other states were interviewed to collect information on features of their programs. Roundtable discussions at study sites obtained input on the problem. Recommendations focused on industry-sponsored classes; advertising; special services; instructional services; staff development; interagency cooperation; and funding. (The document contains 48 references. Appendixes, amounting to approximately one-half of the report, included selected data for study sites, literacy plans for North Carolina community colleges, survey questionnaires, and an inventory of literacy services for study sites.) (YLB)