This study attempted to assess the retention in basic skills of literacy of neo- literates. It also explored the problems of relapse into illiteracy of adult female neo- literates; the possible causes behind the problem of relapse; and, development of a strategy for prevention of relapse into illiteracy. The study looked at neo-literates about three years after they had completed their literacy courses. Two main organisations launching programmes of adult literacy for females in Punjab were considered. The sample of the study involved 1099 respondents that were chosen through multi steps sampling techniques from 9 districts of the Punjab. The research questions were formulated to give a focus for the study. A mixed method research design (concurrent nested design) was applied in order to achieve the objectives of the study. A test was conducted to determine the retention level of neo-literates in reading, writing and numeracy skills. The researcher developed a questionnaire for teachers and supervisors of adult literacy programmes, an interview schedule for neo-literates, an interview schedule for high officials and a list of themes for Focus Group Discussions (FGDs). The views of teachers and supervisors were compared using a chi-square test of independence. The data of interview schedule of neo-literates were analyzed by categorizing, coding and were presented in tabular form with frequencies and percentages. The qualitative data of interview schedule of high official and FGDs were analyzed on the basis of individual statements. It was found that only 17% of neo-literate of National Commission for Human Development (NCHD) could perform better in reading skills, 13% in writing skills and 5% in numeracy skills of adult literacy program after two year of their study. In viiiDepartment of Literacy and Non-Formal Education Punjab (DLNEP) only 6.5% of neo-literate could perform better in reading, 7.5% in writing, and 5.8% in numeracy skills. The adult female neo-literates faced major problems in basic reading and even greater problems in writing and numeracy. Thus, problems included: reading and writing alphabets, combined words having three or more alphabets, sentences, signboards to locate places, applications and letters. Problems related to relapse in numeracy skills were: counting up to 100, solving sums of addition, subtraction, multiplication and division, making home budget and teaching to students of classes 1 and 2. Thus, the teachers were inadequately trained and failed to observe the basic standards of courtesy and respect for the learners. The courses ran at inappropriate times, were too short and used inadequate accommodation. While not excessively difficult, the materials used were not related to the real needs of the learners who wished, in the main, for literacy skills in relation to income generating activities. There was a need for increased opportunities to practise the skills taught and follow up courses were required. It was suggested that literacy programmes may be designed as per demand and need of the learners, income generating component may be included and taught in an integrated way; post literacy programmes may be offered to consolidate and even strengthen the basic skills of literacy.