Based on the experience that today's students find it more difficult than students of previous decades to relate to literature and appreciate its high cultural value, this paper argues that too little is known about the actual teaching and learning processes which take place in literature courses and that, in order to ensure the survival of literary studies in German curricula, future research needs to elucidate for students, the wider public and, most importantly, educational policy makers, why the study of literature should continue to have an important place in modern language curricula. Contending that students' willingness to engage with literature will, in the future, depend to a great extent on the use of imaginative methodology on the part of the teacher, we give a detailed account of an action research project carried out at University College Cork from October to December 2002 which set out to explore the potential of a drama in education approach to the teaching and learning of foreign language literature. We give concrete examples of how this approach works in practice, situate our approach within the subject debate surrounding Drama and the Language Arts and evaluate in detail the learning processes which are typical of performance-based literature learning. Based on converging evidence from different data sources and overall very positive feedback from students, we conclude by recommending that modern language departments introduce courses which offer a hands-on experience of literature that is different from that encountered in lectures and teacher-directed seminars.