The question of how ancient literacy interacted with ancient oral culture is one of the more productive areas of current scholarship. The simple progression from oral to literate that older scholarship assumed has been substantially revised.

Walter Ong's concept of 'primary orality' — the mental world of cultures without writing — has been influential but also criticized for being too sharp a distinction. Ancient literate societies were not fully literate in the modern sense. Texts were produced and received in contexts of oral performance, public reading, and recitation that are quite different from silent reading of the kind most modern readers practice.

Homer is the most discussed case. The oral-formulaic theory established that the Iliad and Odyssey bear the marks of oral composition. But the poems also show signs of having been composed with writing in mind — they're too long to be performed in a single sitting and too structurally complex to be improvised without a fixed text to anchor them. The relationship between the oral tradition and the written texts we have is probably not a simple transcription but a complex interaction.

The role of literacy in ancient commerce is important for understanding who was literate and why. Merchants needed to read and write contracts, keep accounts, and communicate with distant correspondents. The papyri from Roman Egypt show a level of commercial and administrative literacy — bills of sale, tax receipts, personal letters — that suggests functional literacy was much more common than the elite literary tradition implies.