This article explores the opportunities and challenges created by teaching a General English (GE) course at an Iranian university based on New Literacy Studies (NLS). Over a whole semester and relying on various types of qualitative data, we examined how NLS-based pedagogy can be received as an alternative to mainstream GE instruction that is mainly based on traditional teaching of skills and components. Several bodies of data were gathered and explored based on a grounded theoretical approach. A thematic structure emerged from data analysis under two themes: Opportunities (comprising Relevance, Non-fragmentation, Discovery, and Assessment) and Challenges (shaped by Preconceptions, Abilities, and Practicalities). Despite its challenges, NLS-based language teaching appeared to provide important possibilities in tackling not only some of the long-held challenges of teaching GE in Iran, but also many of the common language education concerns in contexts where students come from diverse linguistic, educational, and sociocultural backgrounds.