This document examines the problem of illiteracy. The first chapter provides background and general information about illiteracy, while the second chapter distinguishes between "illiterate" and "functionally illiterate," and provides a new look at the concept of functionality. The third chapter begins with a section about illiteracy in the United States which considers population statistics regarding ethnic groups, age, and other factors. The second section of the third chapter identifies areas of cost which can be directly attributed to inefficiency caused by illiteracy. The fourth chapter traces the influences and effects of illiteracy in families and looks at the services of literacy programs for adults and children. A comprehensive and sequential model of the developmental aspects of literacy is offered in the fifth chapter. In the sixth, the causes of illiteracy are examined. A methodological approach to literacy training through reading readiness that is applicable to adults and children is proposed in the seventh chapter. The eighth chapter emphasizes the importance of the phonics system for children and adults, and the ninth offers suggestions for literacy training. (SH).