AIM: This paper is a report of a discussion of the arguments surrounding the role of the initial literature review in grounded theory. BACKGROUND: Researchers new to grounded theory may find themselves confused about the literature review, something we ourselves experienced, pointing to the need for clarity about use of the literature in grounded theory to help guide others about to embark on similar research journeys. DISCUSSION: The arguments for and against the use of a substantial topic-related initial literature review in a grounded theory study are discussed, giving examples from our own studies. The use of theoretically sampled literature and the necessity for reflexivity are also discussed. Reflexivity is viewed as the explicit quest to limit researcher effects on the data by awareness of self, something seen as integral both to the process of data collection and the constant comparison method essential to grounded theory. CONCLUSION: A researcher who is close to the field may already be theoretically sensitized and familiar with the literature on the study topic. Use of literature or any other preknowledge should not prevent a grounded theory arising from the inductive-deductive interplay which is at the heart of this method. Reflexivity is needed to prevent prior knowledge distorting the researcher's perceptions of the data.