Illinois received one of six 2-year National Institute for Literacy grants to create statewide interagency staff development systems for literacy. After a staff development plan has been developed/implemented, a needs assessment process is developed that entails the following five steps: determine indicators of program quality and develop questions for each, introduce the needs assessment process to program staff, prioritize and select indicators to be addressed, conduct the needs assessment interview(s), and summarize the needs findings and present them to the program(s). Each step was further explained in the following ways: summarizing how it was accomplished in Illinois, identifying "best practices" for implementing it, developing guidelines for implementing the step across agencies, and presenting additional cautions/suggestions regarding its implementation. The needs assessment developed proved to be very successful in many types of programs and groupings of programs in Illinois. (Appendixes constituting approximately 50% of this document contain the following: description of Illinois' system of adult education and literacy and adult staff development, information on key project agencies, overview of project objectives, list of 10 quality indicators for adult education programs in Illinois, sample needs assessment questionnaire, and summary of staff development process.) (MN)