Purpose The purpose of this study was to investigate the relationship between health literacy and overall medication nonadherence, unintentional nonadherence, and intentional nonadherence. Limited health literacy may be associated with worse diabetes outcomes, but the literature shows mixed results, and mechanisms remain unclear. Medication adherence is associated with diabetes outcomes and may be a mediating factor. Distinguishing between unintentional and intentional nonadherence may elucidate the relationship between health literacy and nonadherence in patients with type 2 diabetes. Methods Cross-sectional study of 208 patients with type 2 diabetes recruited from a primary care clinic in St. Louis, Missouri. Information was obtained from written questionnaire and patient medical records. Bivariate and multivariable regression were used to examine predictors of medication nonadherence. Results The majority of patients in the study were low income, publicly insured, and African American, with limited health literacy and a high school/GED education or less. In multivariable models, limited health literacy was significantly associated with increased unintentional nonadherence but not intentional nonadherence. Conclusions Results suggest differences in factors affecting intentional and unintentional nonadherence. The findings also suggest interventions are needed to decrease unintentional nonadherence among patients with type 2 diabetes and limited health literacy. Efforts to address unintentional medication nonadherence among patients with type 2 diabetes with limited health literacy may improve patient health.