Background: Type 2 diabetes mellitus is the most common metabolic disorder and has considerable impact on quality of life. Treatment of DM2 is complex and adherence to treatment requires sophisticated cognition which includes literacy skills. Methods: Health literacy skills of a cross-sectional nonrandom sample of 164 DM2 outpatients at the Diabetes Unit of the Hospital Universitário Pedro Ernesto at the State University of Rio de Janeiro were evaluated by the short version of the Test of Functional Health Literacy in Adults (s-TOFHLA). Procedures available in the SPSS package were used in data analysis. Results: Fourteen out of 164 patients (8.5%) were completely illiterate and therefore were not further assessed. The remaining 150 patients (75 men and 75 women) were the participants of this study. Data showed that 110 (73.3%) participants had adequate health literacy skills, 17 (11.3%) had marginal skills and 23 (15.3%) had inadequate skills. Moreover, older participants performed worse than younger patients. In addition, Caucasian and multiethnic participants performed better than Afro-Brazilians. Furthermore, participants with higher educational and occupational levels outperformed those with lower levels. However, only age and education, but not ethnic group and occupation, contributed significantly and independently to health literacy. Conclusion: This study showed that almost a quarter of the participants are illiterate or have inadequate health literacy skills. Therefore, our results indicate the need for the development of health care instructions properly calibrated to the health literacy skills of DM2 patients.