This article reviews current literature and research on literacy and health and identifies priorities for research on this topic in Canada. Information sources included documents found through an environmental scan, the Alpha Plus collection and a computer search of recent documents. The information was analyzed using a conceptual framework. The review found that low literacy has direct and indirect impacts on health. Families are at risk due to difficulty reading medication prescriptions, baby formula instructions and health and safety education materials. People with lower levels of literacy tend to live and work in less healthy environments. They have more difficulties obtaining employment and income security. Determinants of literacy include: education, early childhood development, aging, living and working conditions, personal capacity/genetics, gender and culture. Action is needed to improve literacy and health through a combination of health communication, education and training, community development, organizational development, and policy development. There is some evidence that such interventions can have a positive effect on health, particularly when combined with one another. Further program and policy development requires greater evidence and evaluation of existing initiatives, more cost/benefit analyses, more culturally specific studies, and greater attention to current social trends and needs.