This study estimates the incidence, characteristics, and patterns of change over time of illiteracy in Morocco. The study compares the results from direct literacy assessment to the conventional methods of self-reported literacy. This effort has provided more detailed, objective information with which patterns of literacy skills in the country may be determined, and their relationship to other important social and economic behaviors and outcomes analyzed. It also examines more closely the reliability and validity of common proxy indicators used to estimate literacy rates and skill levels. Results show that Morocco has been able to halve its literacy rate during the last 30 years; however, large disparities remain between men and women and between urban and rural areas. Implications for methods of measuring literacy and for formulating policy to increase literacy are discussed. (EH)