I arrived in the U.S. with a non-immigrant visa that expires 2016, my dad is a permanent resident who is now applying for his citizenship. My dad wants to sponsor me while i remain in the us. What forms do we have to fill out and would i be able to live and work in the us while my status adjustment is processing.

Review Form I-130. You cannot stay in USA while or just because the case is pending, unless you have some visa/status that allows you to stay.