The exchange of complex health information among patients, providers, health organizations and the public is often described as health literacy. Low levels of health literacy is common and associated with processes of healthcare and important health outcomes. In diabetes, health literacy is related to diabetes knowledge, self-efficacy and self-care behaviors and glycemic control. Health literacy may also provide a better understanding of racial disparities observed in patients with diabetes. Strategies to address health literacy, based upon this understanding of its role, provide a means to improve diabetes care. This article describes the concept of health literacy and its assessment and the evidence of its impact on patients with diabetes, and offers suggested methods and tools that may be implemented to improve clinical care.