In the Community in the Classroom project, 10 Appalachian community-based groups are exploring ways in which literacy education can contribute to community development. This project is challenging assumptions about the role of education, looking beyond the traditional economic context of adult education, and shifting the focus of literacy from individual outcomes to social impacts on the community. Literacy programs that would build communities not only teach specific basic skills, but also provide opportunities for students to learn teamwork, leadership, problem solving, critical thinking, and decision making in a democratic environment. However, developing a community-oriented literacy program is difficult, and even community-based groups may forget lessons learned from their own organizing and think that they must do education as schools do it, by dividing and individualizing students. Barriers to the community approach include the choice of an "expert" teacher over a participatory classroom leader, program standards defined by outside funders, and lack of experience with alternative educational approaches. Community in the Classroom focuses on leadership training for community-based tutors and teachers, design of curriculum that incorporates real community issues, channels for literacy students to contribute to their communities, and organizational networking. Project activities include six workshops for leadership training, special projects developed by each community group, and a process of reflection on program development designed to integrate literacy education with other community empowerment activities. (SV)