This article explores adult literacy pedagogy in the Australian vocational education and training (VET) sector which has long provided most adult literacy programmes. We draw on semi-structured interviews with a small group of eight teachers undertaken in 2005 as part of a project on the social capital outcomes of adult literacy programmes. Through highlighting various elements of student-centred pedagogy, the aim is to demonstrate what is commonly referred to as liberal-progressive pedagogy. We discuss how some educators in this pedagogical tradition have incorporated critical literacy, while others have critiqued it as largely accommodating the status quo. Since the mid-1990s however, the field of adult literacy in VET has been increasingly colonised by neo-liberal ideology which sees literacy equated with human capital. Consequently, adult literacy pedagogy in VET in recent times fits within an industry-dominated, competency-based and nationally accredited VET system in which, we argue, the curriculum provides few spaces for liberal-progressive pedagogy. As teachers express their concerns at the possible demise of liberal-progressive pedagogy in adult literacy in VET, it is timely to reflect on its key elements and its value for social justice.