A qualitative study provided a detailed description of classroom behavior by observing 20 adult literacy classes in 8 states and interviewing teachers of these classes. The methodology used was grounded theory, in which data were collected from a limited sample of cases (classes) and analyzed to find commonalities, themes, and categories that describe the phenomenon in question. Based on classroom observation, researchers divided the content and structure of instruction into these two general types: discrete skills instruction (found in 16 of 20 classes) and making meaning instruction. Despite a proclaimed emphasis on meeting learners' needs, little evidence was seen of teachers systematically assessing learners' needs or evaluating whether instruction was meeting individual or group needs. Seven classroom processes were identified that were important to understanding what happens in adult literacy education classrooms: sanctioning, engagement, directing, correcting, helping, expressing values and opinions, and community. Classroom dynamics were shaped by these three strong forces: classroom composition, enrollment turbulence, and funding pressure. The following sections are appended: Engagement; Literacy Acquisition; Teachers' Knowledge and Classroom Practice; and Continuous Enrollment and Mixed Skill Levels. (Contains 82 references, 2 tables, and 1 figure.) (YLB)