Acetaminophen is highly accessible yet potentially dangerous when used incorrectly. In attempts to address concerns about acetaminophen, the U.S. Food and Drug Administration (FDA) has identified gaps in evidence about unintentional misuse among adolescents. Therefore, our objectives were to assess adolescents' (1) health literacy, (2) knowledge about acetaminophen, (3) recent use of over-the-counter (OTC) medicines, and (4) understanding of medication dosing (instructions for how to use the medicine, i.e., "acetaminophen skills"). We conducted a cross-sectional survey of adolescents and young adults (ages 16-23 years) recruited from education settings and health care sites in Monroe County, New York, from 11/08-9/09. Using structured in-person interviews, we assessed acetaminophen knowledge and recent use of over-the-counter (OTC) medicines. Through role-plays of everyday health scenarios, we assessed participants' abilities to identify acetaminophen in OTC products and answer questions about instructions for acetaminophen use. We measured health literacy with the Rapid Estimate of Adult Literacy in Medicine (REALM) for participants >18, and the REALM-Teen for those <18. Confusion about acetaminophen and its use was common. Limited health literacy was an independent risk factor for poor knowledge, misunderstanding, and potential unsafe use of acetaminophen-containing medicines; however, most participants at all health literacy levels erred dangerously in "unsafe" understanding of acetaminophen use from label instructions. Individuals with limited health literacy could face disproportionate risk of unsafe use of acetaminophen because of confusion and misunderstanding of label information. Better labeling, public health programs, and educational efforts could facilitate safer use of acetaminophen.