The development of literacy abilities in young children has been a major concern for authorities and teachers in the USA for the last two decades. Significant effort has been devoted to ensure that preschool settings allow and motivate children to engage in literacy activities before entering kindergarten. Research has found that a rich classroom environment in preschool settings enables teachers to encourage literacy interest in children at a young age. While a large amount of research has concentrated in testing the effect of prescriptive modifications in the classroom environment, few have focused on studying the design process and tools that teachers follow to design their classrooms. Public policy and research studies in the United States, mention the design of the classroom environment among teacher's responsibilities, but they do not include practical or methodological guides for them to use. The purpose of this research was to study the design process and tools that teachers use to design literacy rich classrooms in preschool settings. A case study was conducted at the ASU Mary Lou Fulton Teachers College Preschool at Arizona State University. This setting provides a unique opportunity for an exploratory study of this nature because it is a private child development laboratory with a flexible curriculum. Participant observation sessions and in depth semi-structured interviews were conducted to explore the design process used and experienced by the teachers. Findings revealed an iterative and cyclic design process that is repeated over time adjusting to the influence of numerous factors. Results also suggest that teacher's knowledge and beliefs highly influence the organization of their classrooms. Considering these factors as a standpoint allows for further exploration to determine a design process suitable for teachers when designing their learning environments. The use of a structured yet flexible design process, can be a potential tool for educators to design their classrooms, collaborate, document and transmit their knowledge. Although the findings correspond to a specific site studied, the implications are wide reaching as problems and opportunities expressed by the staff are common to other educational settings with similar characteristics.