The effects of adult literacy classroom dynamics on the content and structure of instruction, learning processes, and classroom behavior were examined in a study during which 20 adult literacy classes in 8 states were observed and the teachers of those classrooms were interviewed. Key findings were as follows: (1) most classroom instruction focuses on developing basic skills rather than on higher-level abilities; (2) although teachers rank learners' needs as their top priority, their teaching doesn't reflect this goal; (3) seven classroom processes--sanctioning, engagement, directing, helping, expressing values and opinions, and community--are important in understanding adult literacy education in classrooms; and (4) class composition, enrollment turbulence, and funding pressure shape classroom dynamics. The following were among the study's implications for practice, policy, and research: (1) if literacy entails acquiring higher-level as well as basic skills, current instruction is deficient; (2) lack of open discussion may impede development of important oral literacy skills; (3) inclusion activities could help teachers increase community in classrooms at little expense; (4) relatively homogeneous classes seem to promote sharing and community; and (5) the relationship between tardiness and dropping out, relationship between community and key instructional outcomes, and best practices in managing continuous enrollment and mixed skill levels merit further research. (MN)