For the first time, federal funding for literacy services will focus new attention on the plight of the homeless. Under the McKinney Homeless Assistance Act, each state will receive funds for literacy for the homeless. Although there are no firm estimates on how many persons are homeless, a number of indicators point to a problem of major and growing proportions. The homeless belong to three broad categories, which frequently overlap: the situational homeless, the marginal homeless, and the chronically homeless. The widespread escalation of the homeless family contains the seeds of disintegration of the very fabric of American life. Yet the majority of shelters today do not accept whole families. Illiteracy is an important element of the plight of the homeless, and provision of literacy services could make a difference. Two of the most innovative literacy programs for the homeless, Project Adaptive Literacy of the Volunteers of America of Greater New York and the Community Occupational Readiness and Placement Program in Philadelphia, provide a wide range of services of which literacy is just one, although an integral, part. Lessons learned from such programs are present in the McKinney Act in its many built-in safeguards. In addition to literacy and job training, the act will fund related transportation, child care, and counseling costs. Funded projects must be coordinated with agencies that provide a broad range of social and human services. (YLB)