Although low health literacy and suboptimal medication adherence are more prevalent in racial/ethnic minority groups than Whites, little is known about the relationship between these factors in adults with diabetes, and whether health literacy or numeracy might explain racial/ethnic disparities in diabetes medication adherence. Previous work in HIV suggests health literacy mediates racial differences in adherence to antiretroviral treatment, but no study to date has explored numeracy as a mediator of the relationship between race/ethnicity and medication adherence. This study tested whether health literacy and/or numeracy were related to diabetes medication adherence, and whether either factor explained racial differences in adherence. Using path analytic models, we explored the predicted pathways between racial status, health literacy, diabetes-related numeracy, general numeracy, and adherence to diabetes medications. After adjustment for covariates, African American race was associated with poor medication adherence (r = -0.10, p < .05). Health literacy was associated with adherence (r = .12, p < .02), but diabetes-related numeracy and general numeracy were not related to adherence. Furthermore, health literacy reduced the effect of race on adherence to nonsignificance, such that African American race was no longer directly associated with lower medication adherence (r = -0.09, p = .14). Diabetes medication adherence promotion interventions should address patient health literacy limitations.