Twenty first century is regarded as the age of globalization, transnationalism and telecommunication. Education today is focused to prepare people to be flexible, multi-skilled, dynamic problem solvers, and creative explorer of resources with the ability to interpret reality from multiple perspectives and bring harmony between knowledge and creativity. Therefore, the traditional approaches to teaching literature have been replaced with modern approaches. The modern approaches were introduced at the turn of twentieth century. Initial efforts were made by Formalists and the New Critics who assigning primary importance to the text set up the tradition of close reading. This structuralist approach was replaced by post-structural approaches in the second half of the twentieth century which brought the reader to spotlight and supported him/her to hold the centre stage. Today Reader Response, Deconstruction and other deconstructive reader-based interpretative theories such as New Historicism, Post-Structuralist Marxism, Cognitive Poetics, Feminism, Post-colonialism and Postmodernism are considered major interpretive methods. The present paper evaluates both traditional approaches and poststructuralist literary theoretical approaches to the teaching and interpretation of literary texts in the light of research on twenty- first century education and teaching literature. The paper through this evaluation attempts to explore how poststructuralist critical theories for literary analysis support the pedagogies which are recommended for the effective and dynamic twenty- first century classrooms. The paper concludes that reader-based poststructuralist methods of analysis train students to make efforts to bring change into their cognitive structures and see the world from multiple perspectives. Students are enabled to pose challenge to conventions, reject assumptions and established meanings and work out alternate solutions.