A study examined how some teachers, in a graduate class, experienced literature study and began to explore ways of using it with their pupils. Subjects, 24 graduate students (9 secondary school teachers and 15 elementary teachers) enrolled in a class on the reading/writing connection, were randomly assigned to 6 groups of 4 students each. Each group read one book about the westward expansion of the United States in four sessions over a two-week period. Discussion sessions were audiotaped and analyzed. Students kept response logs, and after the last class, students completed a survey. Results indicated that: (1) subjects learned about the use of literature and cooperative groups in the classroom; (2) their exposure to literature led to an understanding of the possibilities for its use in social studies; (3) they learned how personal response to literature can be a powerful motivator for reading and learning; (4) role assignments and particular tasks seemed to contribute to literature discussions for these student teachers; (5) they adopted stances to the books which showed their personal involvement with the stories, understanding of characters, events, and themes, the author's craft, and the book as an object in relation to other sources of historical information; and (6) the only disturbing issue was the low frequency with which a critical stance was adopted. Findings suggest that teachers can develop their own literary knowledge in such a way as to be able to extend their students' understandings. (Twenty-four references, a description of the roles of group members, a list of daily procedures, and annotations of the six books used in the class are attached.) (RS)