Teaching extensive reading at university has a great potential for development of students’ linguistic, thinking and creative skills. By embracing the content of a literary work, students expand their vocabulary and increase their range of grammar constructions. Moreover, literary texts comprise a variety of social, ethical, and moral problems and are characterized by diverse conflicts. They are perceived and understood as a result of literary interpretation and are determined by readers’ life experience and attitudes, cultural and moral standards. Therefore, the reader-response theory becomes relevant, since it considers reading as transaction (interaction) between the reader and the text. It means that the meaning wasn’t put by the author once and for all but will be interpreted differently by different readers. Accordingly, there is no single interpretation of the literary work. The subject of this research is the problem of teaching extensive reading in English at university through reader-response theory. The purpose of the article is to introduce the premises of this theory making a case for its application and to describe the operation of literature circles as a local example of the scientific paradigm. The methodological framework of the research was comprised of the communicative approach to teaching English, task-based language learning and the studentcentered approach in collaborative learning. The article demonstrates that literature circles function in a group where each student performs his/her role and different layers of understanding of the literary text are uncovered through peer discussion. The results of the research can be of interest to both foreign language teachers and to the researchers dealing with applied methodology of teaching literature. The author proves that literature circles favorably affect both students’ motivation for extensive reading and English teaching enhancement at university.