Background: Health literacy (HL) is a person's ability to practically apply a wide range of cognitive and non-cognitive skills in health-related decisions. HL includes five domains: navigate/ access, understand, communicate, evaluate, and use of health information and services. Currently, no tool accurately captures and measures HL in adult patients with asthma and COPD, while utilizing all 5-HL domains. Objective: Develop a comprehensive functional-based measurement tool for adult asthma and/or COPD patients, while assessing HL on routine actions required to manage their chronic respiratory condition(s). Methods: We developed our HL tool based on a conceptualization of the link between HL and asthma and COPD management, during needs assessment stage including; a systematic review, which was followed by patient-oriented focus groups, and key-informant and respirologist interviews. Preliminary face and content validation were obtained by patients' and health professionals' input prior to the pretesting stage. The needs assessment information enabled us to develop passages in scenario-format and corresponding items to assess HL core domains, in addition to numeracy skills, across nine self-management topics: peak flow meters, prednisone use, pulmonary rehabilitation, action plans, flu shots, inhaler technique, lifestyle (nutrition and exercise), trigger control, and map navigation. The tool was pretested with asthma and COPD patients to assess its relevance, clarity, and difficulty. Results: Our systematic review identified the deficiencies of existing HL tools that assessed the HL skills of asthma and COPD patients. The patient-oriented focus groups (n=93) enabled us to identify self-management topics and develop items for our proposed HL tool, which were enriched by input from 45 key informants (eg, policy makers, clinicians, etc.) and 17 respiratory physicians. Preliminary pretesting with a new cohort of participants (36 asthma and COPD patients and 39 key informants) aided in the refinement and finalized our tool. The modified tool included passages and corresponding items related to asthma and COPD management was pretested with 75 asthma/COPD patients who completed the questionnaire and provided their feedback on the clarity, relevance, and difficulty of the tool. The main barrier to self-management pertained to "communication" skills. The flu shot was the most relevant topic (91.2%), while map navigation was the least relevant (63.9%). Action plans were the most difficult topic, where only 55% knew when to utilize their action plans. Numeracy items challenged COPD patients the most. Conclusion: We summarized findings from the development and preliminary testing stages of a new asthma/COPD HL tool. This tool will now be validated with a new cohort of patients.