Study Objectives: To examine the relationship between functional health literacy (FHL) and obstructive sleep apnea (OSA), its diagnosis, related risk factors, and comorbidities. Design: Population cohort study. Setting: Adelaide, South Australia, 2011-12. Participants: 1,021 Men Androgen Inflammation Lifestyle Environment and Stress Study participants aged ≤ 40 years, of whom 627 were identified with OSA by self-report (n = 184 previously diagnosed) or with in-home polysomnography in 837 randomly selected participants without self-reported OSA (n = 443 previously undiagnosed). Interventions: The Newest Vital Sign assessed FHL in 88% of participants. Full in-home unattended polysomnography (Embletta X100) was scored by 2007 AASM (alternative) criteria. Measurements and Results: FHL was adequate in 75.3% (n = 122) of previously diagnosed and 68.3% (n = 261) of previously undiagnosed OSA. Not having a previous diagnosis was independently associated with inadequate FHL (odds ratio [OR]:2.84, 95% confidence interval [CI]:1.25-6.45) and workforce participation (OR = 2.04, 95%CI = 1.01-4.00), and inversely associated with previous snoring (OR = 0.48, 95%CI = 0.29-0.81), obesity (OR = 0.35, 95%CI = 0.15-0.81), and cardiovascular disease (OR = 0.45, 95%CI = 0.24-0.85). In polysomnography participants, inadequate FHL was independently associated with previously undiagnosed OSA (OR = 2.43, 95%CI = 1.40-4.20). In undiagnosed men, less than adequate FHL was independently associated with sedentary lifestyle (OR = 2.42, 95%CI = 1.36-4.29), and depression (OR = 2.50, 95%CI = 1.23-5.09) and inadequate FHL was associated with current smoking (OR = 2.87, 95%CI = 1.21-6.84). The depression association was attenuated after additional adjustment for comorbidities and general health (OR = 2.04, 95%CI = 0.93-4.49, P = 0.076). In previously diagnosed OSA, less than adequate FHL was independently associated with cardiovascular disease (OR = 2.76, 95%CI = 1.09-7.01). Conclusions: Limited functional health literacy was independently associated with obstructive sleep apnea (OSA), OSA diagnosis, lifestyle factors and comorbidities, highlighting the importance of developing and promoting national disease-specific health literacy policies.