Background: This study aims to investigate the association between mental health literacy and the mental health status, particularly depression, among adolescents. Methods: This was a population-based health survey utilising a two-stage sampling technique. Mental health literacy was measured by the Australian National Mental Health Literacy and Stigma Youth Survey with the depression vignette only. Depression was assessed by the Depression sub-scale of the Depression, Anxiety, Stress Scale. Data were analysed using multiple logistic regression modelling techniques with adjustment for cluster sampling effect. Results: A total of 1678 students responded to the survey providing usable information. Only 275 (16.4%) respondents were classified as having an adequate mental health literacy level with correct identification of depression and also intended to seek help, with 392 (23.4%) of the total sample correctly identified the vignette as depression. Two hundred and forty eight (14.8%) were classified to have moderate to severe depression. Multiple logistic regression analysis results suggested that young people who had experienced moderate to severe level of depression in the week prior to the survey were more likely to have an inadequate level of MHL (OR = 1.52, 95% C.I. = 1.01-2.31) after adjusting for a potential confounding factors and cluster sampling effects. Conclusions: Results suggested that mental health literacy level was associated with mental health status, particularly depression of young people. The results have important implications, both clinically and on a population level, on the prevention of mental health problems and for the improvement of the mental health status of adolescents.