In order to fill in the research gap related to the theory and practice of critical literacy in Taiwan, this article describes an English Conversation activity offered during the 2005 spring semester at a university in southern Taiwan. The article uses a critical instructional model to analyze students' team dialogues as responses to a picture-book-based exercise. The informants in the study included the instructor and his 26 students. This research is a qualitative case study in that it employs various descriptive data (e.g. students' team dialogues and reflection papers) in an attempt to (1) investigate the extent to which the goals of critical literacy were achieved in the classroom and (2) arrive at some implications for the implementation of critical literacy in Taiwan. This study suggests that instruction based on social-issue picture books is effective not only in promoting literacy learning but also in eliciting meaningful themes for students. Second, it shows that language learning is best understood as socially constructed. Critical instruction should promote not only text-centred responses but also reader responses to social issues; this can lead to more critical stances for students. Third, the study suggests that a critical literacy curriculum should progress from personal/cultural resources to critical social practices and critical stances. Finally, enthusiasts of critical literacy should not insist on including all dimensions of the analytical model used in the study. Instead, teachers should consider their students, teaching purposes and teaching contexts when they use elements from the critical literacy instructional model.