Health-related quality of life (HRQOL) is an important outcome in cancer care. Few studies indicate that that health literacy (HL) influences cancer patients’ HRQOL, but additional investigation is needed. We examined the relation between HL and HRQOL among cancer patients. A cross-sectional survey was conducted with cancer patients in Wisconsin during 2006–2007. Data on sociodemographics, clinical characteristics, HRQOL, and HL were obtained from the state’s cancer registry and a mailed questionnaire. Regression analyses were used to characterize the association between HRQOL and HL. The study sample included 1,841 adults, newly diagnosed with lung, breast, colorectal, or prostate cancer in 2004 (response rate=68%). HRQOL was measured with the Functional Assessment of Cancer Therapy-General (FACT-G). Adjusting for confounders, higher HL was associated with greater HRQOL (P <.0001). Controlling for covariates, we found significant differences between those in the highest and lowest health literacy categories (P <.0001) and in the physical (P <.0001), functional (P <.0001), emotional (P <.0001), and social (P =.0007) well-being subscales. These associations exceeded the minimally important difference threshold for overall HRQOL and functional well-being. HL is positively and independently associated with HRQOL among cancer patients. These findings support adoption of HL best practices by cancer care systems.