Health literacy refers to an individual's ability to find, understand and use health information in order to promote and maintain health. An individual's health literacy may also be influenced by the way health care organisations deliver care. The aim of this study was to investigate the influence of hospital service type (public versus private) on individual health literacy.Two cross-sectional surveys were conducted using the Health Literacy Questionnaire (HLQ), a multi-dimensional self-report instrument covering nine health literacy domains. Recently discharged private patients (n = 3121) were sent the survey in English, public patients (n = 384) were sent the survey in English, Arabic, Chinese, Vietnamese, Italian or Greek. Eligibility included hospitalisation ≥24 h in last 30 days, aged ≥18 years, no cognitive impairment. Odds ratios were used to assess differences between hospital sociodemographic and health related variables. ANOVA and Cohen's effect sizes compared HLQ scores between hospitals. Chi square and multiple logistic regression were used to determine whether differences between private and public hospital HLQ scores was independent of hospital population sociodemographic differences. ANOVA was used to review associations between HLQ scores and subgroups of demographic, health behaviour and health conditions and these were then compared across the two hospital populations.Public hospital participants scored lower than private hospital participants on eight of the nine health literacy domains of the HLQ (scores for Active Appraisal did not differ between the two samples). Six domains, five of which in part measure the impact of how care is delivered on health literacy, remained lower among public hospital participants after controlling for age, education, language and income. Across both hospital populations, participants who were smokers, those who had low physical activity, those with depression and/or anxiety and those with 3 or more chronic conditions reported lower scores on some HLQ domains.Our finding of lower health literacy among patients who had received care at a public hospital in comparison to a private hospital, even after adjustment for sociodemographic and language differences, suggests that private hospitals may possess organisational attributes (environment, structure, values, practices and/or workforce competencies) that result in improved health literacy responsiveness.