An ethnographic study examined illiterates and their understanding of literacy. The theoretical background of the study is based on the thesis of "contemporary orality": that India is a fundamentally oral culture that retains all the characteristics of primary orality (Walter Ong's term) through the use of speech as the dominant medium of communication. Twelve subjects from Delhi, India were interviewed to determine their organization and application of knowledge. Results indicated that the illiterates find: (1) knowledge as synonymous with being skillful; (2) knowledge as interactional versus manual; and (3) knowledge as hierarchical versus egalitarian. Results also indicated that the subjects believe that literacy increases social inequality in the sense that literates create hierarchies of intelligence that lead to unequal social relationships between literates and illiterates. Rethinking the role of literacy is an issue that communication scholars need to address. (RS)