Health literacy is a concept that can be widely embraced by schools. Schools throughout the world contribute to the achievement of public health goals in conjunction with their educational commitments. In this paper, the interface between a school's core business of education and public health goals is identified, and examples provided in the area of nutrition demonstrating how these links can operate at school level. The structure and function of the health promoting school is described and the author proposes that there is a very close connection between the health promoting school and the enabling factors necessary in achieving health literacy. Major findings in the literature that provide evidence of good practices in school health education and promotion initiatives are described. Also, those factors that make schools effective and which facilitate learning for students are identified. There is a substantial overlap between the successful components of a health promoting school and effective schools. This enables schools to potentially achieve all three levels of health literacy, including level 3—critical health literacy. However, there are three challenges that must be addressed to enable schools to achieve this level: the traditional structure and function of schools, teachers practices and skills, and time and resources. Strategies are proposed to address all three areas and to reduce the impediments to achieving the goals of health literacy and public health using the school as a setting.