Successful management of HIV requires patient understanding and ability to act on treatment information. We examined the relationship between patient literacy and understanding of HIV treatment. Literacy, knowledge of CD4 count and viral load, and correct identification of HIV medications in regimen were evaluated in 204 patients receiving care in Shreveport, Louisiana and Chicago, Illinois. One-third of patients had limited literacy skills. These patients were less able to describe CD4 count (p < 0.001), viral load (p < 0.001) and to correctly identify medications in their regimen (p < 0.001). In the multivariate analysis, limited literacy was an independent predictor of poor understanding of CD4 count (OR 2.9, 95% CI: 1.3-6.3) and viral load (OR 4.1, 95% CI: 1.9-8.8). For correct medication identification, a significant interaction was found between number of HIV medications and literacy level. Among patients taking only 1-2 HIV medications, 100% of higher literate patients were able to identify their medications, compared to none of the lower literate patients prescribed three or more HIV medications. Patients with limited literacy skills may lack essential knowledge related to their HIV treatment. Clinicians may require additional training for improving communication with these patients.