Background The internet and social media are increasingly popular sources of health information for adolescents. Using online health information requires digital health literacy, consisting of literacy, analytical skills and personal capabilities such as self-efficacy. Appraising trustworthiness and relevance of online health information requires critical health literacy to discriminate between sources, critically analyse meaning and relevance, and use information for personal health. Adolescents with poor digital health literacy risk using misinformation, with potential negative health outcomes. We aimed to understand adolescents’ contemporary digital health literacy and compared self-efficacy with capability. Methods Adolescents (12–17 years) completed an eHEALS self-report digital health literacy measure, a practical search task using a think-aloud protocol and an interview to capture perceived and actual digital health literacy. eHEALS scores were generated using descriptive statistics, search tasks were analysed using an observation checklist and interviews were thematically analysed based on Social Cognitive Theory, focussing on self-efficacy. Results Twenty-one participants generally had high self-efficacy using online health information but perceived their digital health literacy to be higher than demonstrated. They accessed online health information unintentionally on social media and intentionally via search engines. They appraised information medium, source and content using general internet searching heuristics taught at school. Information on social media was considered less trustworthy than websites, but participants used similar appraisal strategies for both; some search/appraisal heuristics were insufficiently nuanced for digital health information, sometimes resulting in misplaced trust or diminished self-efficacy. Participants felt anxious or relieved after finding online health information, depending on content, understanding and satisfaction. They did not act on information without parental and/or health professional advice. They rarely discussed findings with health professionals but would welcome discussions and learning how to find and appraise online health information. Conclusions Whilst adolescents possess many important digital health literacy skills and generally feel self-efficacious in using them, their critical health literacy needs improving. Adolescents desire increased digital health literacy so they can confidently appraise health information they find online and on social media. Co-designed educational interventions with adolescents and health providers are required.