A study examined how a teacher accommodated diversity in a fifth-grade classroom in an inner-city school during a 2-year project involving literature-based reading instruction with small student-led response groups called Book Clubs. The Book Club project operated in the classroom using the four components of literacy instruction--reading, writing, discussion, and instruction. The teacher took field notes three or four times per week and kept a personal journal. Some groups were audio-taped and video-taped, and university-based researchers took field notes on a regular basis to provide data about group activity. Four issues that arose during the 2-year study were: (1) grouping students heterogeneously so that they could function cooperatively to discuss literature; (2) choosing appropriate literature, in terms of reading level, interest level, and availability; (3) giving students a voice in this process as the teacher struggled to help students take ownership of the learning process; and (4) working around the constraints of teaching in a public school system. Findings suggest that accommodating the diversity in the students by dealing with these issues as they arose brought successful literacy experiences to many of the students during their year in Book Club. (Three figures representing Book Club components, offering students suggestions on what to put in their reading log, and a sample log page, and a table listing class-generated reading log choices are included; 21 references are attached.) (Author/RS)