Diabetes mellitus is approaching epidemic proportions in most countries and has captured the attention of physicians at local, national and global levels. The elderly population remains at a higher risk for diabetes mellitus, and the disease poses unique concerns for geriatricians, primary care physicians, nurses, diabetic educators and pharmacists who provide care to the elderly. Safe and effective use of diabetes medications depend on the extent of patient`s understanding, knowledge and actions. Such actions relate strongly to people’s health literacy. Health literacy is defined as ‘The ability to make sound health decisions in the context of everyday life- at home, in the community, at the workplace, the health care system, the market place and the political arena. Discussion: The US Institute of Medicine report, “Health Literacy: A Prescription to End Confusion”, reported that low health literacy negatively affects the treatment outcome and safety of care delivery. People concerned, especially elderly are more likely to be admitted to hospital, and they may stay longer and be less likely to take their medicines and/or make errors with those medicines. Health literacy covers a wide range of activities, and older patients ability to make good decisions about medicines, and use them safely and effectively, is an important part of healthcare practice. Low health literacy is a factor that underpins the wider issue of health equity, since getting the best outcome of a health system is a complex issue and arguably requires high levels of health literacy. Collaborative efforts are continually needed to allocate and maximize utilization of resources to help empower older adults with diabetes to overcome literacy barriers to optimize their disease management. Conclusion: Healthcare providers must tailor individualized treatment methods with emphasis on addressing patient literacy to achieve the ultimate goal of optimizing pharmacotherapy of diabetes in elderly population to improving the quality of life for this vulnerable population.