Health literacy is simply defined as an individual's ability to access, understand and use information in ways that promote and maintain good health. Lower health literacy has been found to be associated with increased emergency department presentations and potentially avoidable hospitalisations. This study aimed to determine the health literacy of hospital inpatients, and to examine if associations exist between different dimensions of their health literacy, sociodemographic characteristics and hospital services use.A written survey was sent to 3,252 people aged ≥18 years in English, Arabic, Chinese, Vietnamese, Italian or Greek. The survey included demographic and health questions, and the Health Literacy Questionnaire (HLQ). The HLQ is a multidimensional instrument comprising nine independent scales. Use of hospital services was measured by length of stay, number of admissions in 12 months and number of emergency department presentations. Effect size (ES) for standardised differences in means described the magnitude of differences in HLQ scale scores between demographic and socioeconomic groups.385 questionnaires were returned (13%); mean age 64 years (SD 17), 49% female. Aged ≥65 years (55%), using the Internet < once a month (37%), failure to complete high school (67%), low household income (39%), receiving means-tested government benefits (61%) and being from a culturally and linguistically diverse (CALD) background (24%), were all associated with lower scores in some health literacy scales. Being aged ≥65 years, not currently employed, receiving government benefits, and being from a CALD background were also associated with increased use of some hospital services. There was no association between lower scores on any HLQ scale and greater use of hospital services.We found no association between lower health literacy and greater use of hospital health services. However increased age, having a CALD background and not speaking English at home were all associated with having the most health literacy challenges Strategies to address these are needed to reduce health inequalities.