Literature circles involve small temporary discussion groups where students choose their own reading material. The groups are student-centered and allow for independence, responsibility, and ownership over reading. Students take on roles like facilitator, illustrator, or connector to guide discussions focused on insights and questions rather than skills or the curriculum. Benefits include student-centered learning, collaboration, and empowering students to find their own meaning. Challenges can arise from a lack of external incentives, discomfort with collaboration over competition, adherence to timelines, understanding of roles, and opinions on grouping.