This paper focuses on the work that Louise Rosenblatt and her followers in the United States have done to improve the teaching and learning of literature at all educational levels. Although these researchers have focused almost exclusively on the use of literature in the native language, the paper uses transactional theory as a basis for teaching and research in the field of English as a Second Language. After summarizing the most important concepts from Rosenblatt's work, the paper describes some of the research done by the Center on English Learning and Achievement (CELA) and the National Council of Teachers of English (NCTE), as the research provides practical advice for using the transactional approach to literature in the classroom, whether it be in the native language or a second language. Contains 31 references. (LH)