Background The concept of health literacy (HL) may help us to better understand the mechanisms leading to health disparities, and to focus on the factors that can be influenced. However, not much is yet known about how HL is related to health disparities, or whether the association exists among adolescents. The aim of the study was to examine the associations between structural stratifiers, HL and health indicators among adolescents. Methods The nationally representative Finnish Health Behaviour in School-aged Children survey data (n=3833) were collected from 13- and 15-year-old pupils in the spring of 2014. Pearson correlation coefficients were calculated, and separate path models were estimated for the perceived health and health behaviour measures. Results HL was found to be an independent factor explaining disparities in health. Higher HL was related to positive health outcomes. HL also acted as a mediator between health behaviours and structural stratifiers, except for gender. School achievement and educational aspirations were among the factors explaining the HL level, which in turn, explained the health indicators. Conclusion The concept of HL is of use in understanding health disparities. In particular, HL provides a mechanism via which school achievement and educational plans affect health outcomes. Low HL places adolescents who have poor school achievement and who do not intend to continue on an academic path in an unequal position with respect to their health.