Objectives: Many scales have been developed to assess health literacy. These scales have been developed extensively in clinical populations in developed countries. Our study describes the process of development and validation of the Health Literacy Questionnaire to measure health literacy in the general Iranian population. Methods: We followed the scale development process outlined by Schwab in 1980. After a comprehensive review of the research published on Nutbeam's definition of health literacy and its measurement, two focus groups were considered to generate a pool of items. We then assessed the face validity and content validity of the items. The final version of the questionnaire was subject to independent exploratory and confirmatory factor analysis. The internal consistency of the questionnaire was evaluated using Cronbach's alpha. Finally, construct validity was assessed using bivariate analysis between the total scores on the scale and theoretically relevant variables. Results: The results of exploratory factor analysis revealed a three factor 14-item structure for the scale. Confirmatory factor analysis provided a good statistical and conceptual fit for the data. The analysis of the internal consistency of the scale was satisfactory (α = 0.798). Further, health literacy was significantly associated with participants' age, educational level, self-rated household income, smoking history, self-rated health, and self-rated health literacy. Conclusions: The results we obtained indicate that this newly constructed health literacy tool is highly valid and reliable. Prospective studies are required to evaluate the predictive validity of the scale with regard to health outcomes.