Health literacy is a dynamic, multifaceted skill set that relies on patients, healthcare providers, and the healthcare system. In addition, health literacy assessment provides an avenue for evaluating patient understanding and offers insights into their health management capabilities. Inadequate health literacy results in poor patient outcomes and compromised care by considerably hindering successful communication and comprehension of relevant health information between the patient and the provider. In this narrative review, we explore why limited health literacy poses serious implications for orthopaedic patient health and safety, expectations, treatment outcomes, and healthcare costs. Furthermore, we elaborate on the complexity of health literacy, provide an overview of key concepts, and offer recommendations for clinical practice and research investigations.