Case-based instruction (CBI) is used in a variety of professional schools. Studies indicate that CBI can have promising results, but they do not provide insights into the theoretical justification for using CBI. An earlier paper (Risko and Kinzer, 1994) identified five theoretical constructs for CBI: anchored instruction; reflective thinking; situated cognition; generative learning; and the ability that CBI has to prepare teachers to deal with the ill-structured nature of teaching. This research project studied the nature of these theories in a 16-week literacy course for preservice elementary education majors that used CBI in order to extend the theories themselves and reconsider their viability for CBI. Data included information about classroom interactions, the instructor's reflections about class activities, the instructor's reflections about the theories, students' answers to study guides as they analyzed the cases, videotapes of each class session, students' lesson plans and reflections from their concurrent field experiences, and audiotapes and notes from individual interviews with each student at the end of the semester. (Contains 22 references.) (Author/MES)