Purpose: The purpose of this study was to understand the level of functional health literacy and its influence on perceived health status in Korean older adults. Methods: A cross-sectional survey was conducted in Daegu, Kyungpook and Susan province. A total of 103 older adults aged 65 yr or older were interviewed in person between July 1 to August 30, 2007. Results: A high proportion of older adults were unable to read and understand written basic medical instructions. Only 40-50% were able to comprehend directions for taking medication four times a day or on an empty stomach. Only 11-38% were able to understand information regarding treatment procedure, informed consent, or educational material for elderly fall prevention. Individuals who were older, single, and had less education and income were more likely to have lower functional health literacy. After adjusting for sociodemographic variables, individuals with lower health literacy had poorly perceived health status. Conclusion: Many Korean older adults have a very low level of fuctional literacy. Low health literacy was independently associated with poorly perceived health status.