Low health literacy (LHL) significantly impacts patients’ ability to participate actively in their healthcare. Registered nurses (RNs) play a crucial role in identifying LHL and addressing patient knowledge gaps and skill deficits. This correlational study examined the relationship between RNs’ predictions of patients’ health literacy levels (HLL) and the actual HLL of a predominately Hispanic patient population. In addition, personal factors (i.e., demographics) were analyzed to determine their influence on the nurse’s predictions and patients’ HLL. Data were collected from 84 participant patient–nurse couplets admitted to a medical-surgical unit in a rural setting located on the United States–Mexico border. In addition to demographic information collected via survey, RNs were asked to predict their patient’s health literacy abilities while the Newest Vital Sign, a health literacy assessment tool, was deployed to determine the actual HLL of patients participating in the study. Data were analyzed using descriptive statistics, t-tests, and chi-square tests while a Spearman correlational model was used to examine the relationship between predicted HLL and actual HLL. Finally, a logistic regression model was used to analyze the relationship between personal factors and HL data for RNs and patients. Analysis of the data revealed that RNs consistently overestimated patients’ abilities, as evidenced by the disparity between patients’ actual HLL (mean 1.71) and predicted HLL (mean 4.26) by RNs, with a moderately strong positive relationship ( rs = .418). Notably, higher academic preparation and years of experience did not enhance the RNs’ ability to identify LHL while the highest level of education completed was the only statistically significant predictor of adequate health literacy in the patient population sampled. These findings emphasize the need to prioritize effective health literacy education in RN academic preparation and clinical practice to support the detection of LHL when a standardized health literacy assessment tool is not utilized in the clinical setting. By recognizing the presence of LHL, healthcare professionals can better support patients’ needs and bridge the knowledge gap, ultimately improving patient outcomes.