Objective: To examine whether the effect of health literacy (HL) on patient-physician communication varies with patient-physician language concordance and communication type. Methods: 771 outpatients rated three types of patient-physician communication: receptive communication (physician to patient); proactive communication (patient to physician); and interactive, bidirectional communication. We assessed HL and language categories including: English-speakers, Spanish-speakers with Spanish-speaking physicians (Spanish-concordant), and Spanish-speakers without Spanish-speaking physicians (Spanish-discordant). Results: Overall, the mean age of participants was 56 years, 58% were women, 53% were English-speakers, 23% Spanish-concordant, 24% Spanish-discordant, and 51% had limited HL. Thirty percent reported poor receptive, 28% poor proactive, and 56% poor interactive communication. In multivariable analyses, limited HL was associated with poor receptive and proactive communication. Spanish-concordance and discordance was associated with poor interactive communication. In stratified analyses, among English-speakers, limited HL was associated with poor receptive and proactive, but not interactive communication. Among Spanish-concordant participants, limited HL was associated with poor proactive and interactive, but not receptive communication. Spanish-discordant participants reported the worst communication for all types, independent of HL. Conclusion: Limited health literacy impedes patient-physician communication, but its effects vary with language concordance and communication type. For language discordant dyads, language barriers may supersede limited HL in impeding interactive communication. Practice implications: Patient-physician communication interventions for diverse populations need to consider HL, language concordance, and communication type. © 2009.